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

XR Brands Releases 'Pup Teddy Bear' BDSM Plush

XR Brands has expanded its Master Series collection BDSM-themed teddy bears with the Pup Teddy Bear Plush.

Cosplayground Releases 'Furiosa XXX: A Porn Parody'

Cosplayground has released its seventh original production, “Furiosa XXX: A Porn Parody.”

Washington Post Profiles ECP VP Solomon Friedman's Appearance at XBIZ LA

The Washington Post published this weekend a lengthy feature about Pornhub and Aylo, focusing on Ethical Capital Partners’ VP of Compliance Solomon Friedman’s keynote address and other appearances at XBIZ Los Angeles in January.

Sexperts Business Community Launches Platform for Promoting Counseling Services

The Sexperts Business Community (SBC) has launched a new platform for sex and relationships experts.

SexToyDistributing Now Shipping New BDSM Sets From Bedroom Bliss

SexToyDistributing is shipping three new BDSM sets from couples-centric pleasure brand Bedroom Bliss.

'Sex Workers Deserve Protections': Congressional Candidate Joe Cohn Reaches Out to Adult Community

Veteran civil rights attorney Joe Cohn, who is currently running in a New Jersey Democratic primary for a seat in the U.S. House of Representatives, says he is reaching out to the adult community to champion an inclusive approach to civil liberties that encompasses all sex workers and adult businesses.

Mile High Unveils New Unscripted Studio 'Sex on Sight'

Mile High Media has launched a new unscripted-content studio, Sex on Sight.

Belgian Producer Dennis Black Magic Sentenced to 7 Years for Rape, CSAM

Belgian adult producer and director Dennis Black Magic has been sentenced to seven years in prison and a $4,000 fine for the rape of eight models and distribution of CSAM.

Foxxy Stars in Latest From TransAngels

Foxxy stars with Josh Rivers in "Getting D in Detention," from TransAngels.

Wicked Sensual Care Launches Sexual Assault Awareness Campaign

Wicked Sensual Care (WSC) has launched its annual campaign for Sexual Assault Awareness month.

Show More