Spokesperson: SBA Will 'Probably Not' Waive Loan Exclusion for 'Prurient' Sex Businesses

Spokesperson: SBA Will 'Probably Not' Waive Loan Exclusion for 'Prurient' Sex Businesses

WASHINGTON, D.C. — A spokesperson for the Small Business Administration (SBA) told news site Buzzfeed that the federal agency will “probably not” waive the language excluding “prurient” sex workers and sex businesses from applying for CARES disaster relief.

In a rare statement by an SBA official about the controversial sex-oriented business exclusion, Office of Disaster Assistance Press Officer Carol Chastang spoke about the “prurient” clause for an article published by Buzzfeed on Saturday.

The article is headlined, "If You Strip, Make Porn, or Sell Sex Toys, You Might Not Get Any Coronavirus Aid Money. That’s Where the First Amendment Comes in."

When reporter Otilia Steadman asked “if the restriction on ‘prurient’ businesses might be waived by the SBA in light of the rushed rollout,” Chastang answered, “Probably not.”

[Update, 12:20 p.m.: XBIZ contacted Carol Chastang and other SBA press officers this morning to comment on or clarify her statement to Buzzfeed, or the “prurient” clause and its application to sex workers and sex businesses in general.

Although we had not received a response by publication time, at 12:13 p.m. SBA Press Office Director Carol Wilkerson e-mailed XBIZ thanking us for the email and only commenting about Chastang's statement that "our response is final."]

XBIZ had contacted the SBA in late March, when reports started circulating that the SBA loan application included language that appeared to exclude sex workers and sex businesses from disaster relief.

The language of the SBA application asks potential applicants for economic relief to first confirm they do not belong to one of several disqualifying categories.

The longest exclusion states that the applicant must declare that they do not “present live performances of a prurient sexual nature or derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.”

XBIZ asked SBA Press Office Director Carol Wilkerson for a comment or clarification regarding the seemingly exclusionary language. Wilkerson referred the question to Mark W. Randle, at the agency’s Office of Disaster Assistance’s Field Operations Center (West), who only pointed out that the language “did not originate with the CARES Act.”

“It is in accordance with the Code of Federal Regulations (CFR) that governs SBA disaster assistance,” Randle wrote, citing a Clinton-era 1996 document (amended in 1997 and '98).

"A Complete Absurdity"

Despite Saturday’s statement by Office of Disaster Assistance Press Officer Chastang, the general consensus of First Amendment legal experts, who have been cautiously encouraging adult industry businesses to apply for the loan, is that the obscure word “prurient” does not apply to businesses with a “healthy interest in sex.”

As industry attorney Larry Walters, from the Walters Law Group, explained to XBIZ, the word “prurient” is defined in the law as “a shameful or morbid interest in sexuality.”

Obviously, Walters pointed out, “adult businesses could take the position that their content does not involve a shameful or morbid interest in human sexuality, but a healthy one.”

Jeffrey Douglas, chairperson for adult industry trade group the Free Speech Coalition (FSC), told Buzzfeed that the exclusion was a “complete absurdity.”

“The people who wrote [the SBA’s guidelines] may have intended it to cover a wide range of speech, or even, potentially, anything that they themselves would be aroused by,” Douglas — also a chair emeritus of First Amendment Lawyers Association (FALA) — told the news site. “But the Constitution requires enormous specificity when you attempt to restrict speech or punish speech or, in this category, deny access to government services based on speech.”

Last week, a law firm filed a federal lawsuit on behalf of the parent company of a Flint, Michigan gentlemen's club, alleging that the loan application’s “Sex Business Exclusion” violates the First and Fifth amendment rights of legal businesses.

Flint's Little Darlings club shut down on March 23, after Michigan Governor Gretchen Whitmer ordered a suspension of all "activities that are not necessary to sustain or protect life.” Parent company DV Diamond Club of Flint applied for a loan from the $349 billion Paycheck Protection Program (PPP) included in last month's CARES Act.

Although DV had not received an answer about their application by the time they filed their suit, they are suing based on information from "numerous other similar businesses" which had their PPP applications denied by SBA-lending banks.

The “Sex Worker Exclusion” could allow SBA-lending banks’ loan officers, in practice, to operate as a censorship board, making calls about the application of the ancient word “prurient,” which has not been unambiguously defined in either legal or casual use since the Supreme Court used it as a First Amendment litmus test back in 1973.



Copyright © 2024 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Williams Trading Co. Launches Pre-Black Friday Warehouse Sale

Williams Trading has launched its pre-Black Friday warehouse sale for retailers today.

Niki Media Acquires BritSexCash

Production studio Niki Media BV has acquired affiliate program BritSexCash.

FSC Warns of Nude Photography Site Falsely Claiming Affiliation With Organization

Free Speech Coalition (FSC) published a statement Friday warning of a nude art photography website fraudulently claiming to be associated with the industry trade organization.

Orion Unveils 6 New Styles From 'Noir Handmade' Line

Orion Wholesale has introduced six new clubwear styles from its Noir Handmade line of apparel.

BasisDx Adds Comfort Collect Device to 'Pro13' Home Testing Kit

PASS-certified home testing kit manufacturer BasisDx has added the new Comfort Collecting Device to its Pro13 kit.

MojoHost Reaffirms Commitment to Adult Industry Amid Project 2025 Implications

In the wake of Tuesday's election and amid concerns about the possible ramifications for the adult industry, MojoHost President Brad Mitchell has releases a statement addressing Project 2025 and the future of the industy.

XBIZ Honors Retail Edition to Light Up Hollywood Roosevelt Hotel

XBIZ is pleased to announce that the pleasure industry’s biggest night, the retail edition of the annual XBIZ Honors, set for Saturday, Jan. 18, will be held at the historic Hollywood Roosevelt Hotel.

Adult Web Hosting Service 'Midnight-Host' Launches

Midnight-Host, a new web hosting service designed specifically for adult websites, has launched.

Pipedream Expands 'Anal Fantasy Elite' Collection

Pipedream Products has expanded its Anal Fantasy Elite collection with two new stimulators.

ASN Lifestyle Magazine Joins Pineapple Support as Media Sponsor

ASN Lifestyle Magazine has joined the ranks of over 60 adult businesses and organizations committing funds and resources to Pineapple Support, partnering with the organization as a media sponsor.

Show More