Debate Over SBA Loan's 'Sex Business Exclusion' Hinges on Obscure Word 'Prurient'


LOS ANGELES — The debate over whether sex workers and sex oriented businesses are able to apply for federal disaster relief loans through the U.S. Small Business Administration (SBA)’s “Coronavirus Aid, Relief, and Economic Security” (CARES) program continues, with a focus on the interpretation of the word “prurient.”

The longest exclusion — which appears to be deliberately worded to target the largest segment of sex workers and sex-related businesses possible — 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.”

But although in 2020 this very specifically-worded exclusion may be interpreted to include many Internet-based performers and businesses, the exclusionary language dates from the mid-to-late 1990s.

A Clinton-Era Regulation

XBIZ contacted SBA’s spokesperson Mark W. Randle, at the agency’s Office of Disaster Assistance’s Field Operations Center – West, who 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 1998).

The relevant passage reads:

Title 13. Business Credit and Assistance

Chapter I – Part 123

DISASTER LOAN PROGRAM

Subpart D — Economic Injury Disaster Loans

123.301   When would my business not be eligible to apply for an economic injury disaster loan?

Your business is not eligible for an economic disaster loan if you (or any principal of the business) fit into any of the categories in §§123.101 and 123.201…

Subpart C — Physical Disaster Business Loans

§123.201   When am I not eligible to apply for a physical disaster business loan?

(f) You are not eligible if your business presents live performances of a prurient sexual nature or derives 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.

[61 FR 3304, Jan. 31, 1996, as amended at 62 FR 35337, July 1, 1997: 63 FR 46644, Sept. 2, 1998]

This language — excluding what in the mid-1990s would have been brick-and-mortar businesses like strip clubs and sex shops in the process of transitioning to digital platforms — was part of a set of 1995 proposals drafted “in response to President Clinton’s government-wide regulatory review directive,” requesting “a page-by-page and line-by-line review of all of its existing regulations.”

At the time, the SBA claimed, the overhaul “reworded, renumbered and relocated” almost all its provisions, added “a few new or revised policies” and deleted “several sections” in order “to streamline and clarify the regulations.”

Prurient: “Shameful and Morbid”

XBIZ also spoke with industry attorney Lawrence Walters, of the Walters Law Group, who spoke about the controversy regarding the old-fashioned word “prurient” that is part of the application’s exclusionary language.

“The language has been around for all these SBA loans, but it obviously becomes much more of a matter of concern now since sexually oriented business have been dramatically impacted throughout the country,” Walters told XBIZ.

“I have not applied for an SBA loan on behalf of our clients, so I haven’t had to deal with it directly, but I’m aware of the language.”

Walters explained that 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.”

According to the attorney, “eligible people should apply for this loan, and if they deny it, it would be an unconstitutional condition on a government benefit.”

Walters also encouraged people interested in applying to “check with their lawyers if they have more specific questions about the language of the application.”

The etymological origins of the word “prurient” are more mysterious, and do not necessarily involve “shame” or “morbidness.” It’s attested in English in the 16th century, deriving from a similar Latin adjective with the connotation of “scratching a mental itch or longing” and “being wanton.”

The Latin verb “pruire” literally means “to itch.” According to etymological sources, in the mid-1600s the term “prurient” poetically shifted meaning in English from “itching” to “having an itching desire.” It is only a century later, in the 1750s, that the word gained the puritanical connotation of “lascivious and lewd.”

An Odd Way to Put Things

In “Prurient Interests,” a 2002 column on NPR’s Fresh Air program, UC Berkeley information studies scholar Geoffrey Nunberg pointed out the difficulty of building law around obsolete words that few people can define properly.

The Miller test, developed in the 1973 case Miller v. California, is used by courts all the way up to the United States Supreme Court for determining whether speech or expression can be labeled “obscene,” making it unprotected speech under the First Amendment.

By devising the Miller test, Nunberg explained, the Nixon-era Supreme Court made one of the standards for judging obscenity be ‘whether, to the average person, applying contemporary community standards, the dominant theme of the material […] appeals to prurient interest.’ With minor variations, that formula has been widely used ever since then.”

“It’s an odd way to put things,” Nunberg continued, “asking the average person to judge whether something ‘appeals to prurient interest’ when the average person probably doesn’t know the word prurient in the first place. I have an image of Larry Flynt stopping passers-by to ask their opinion of the latest number of Hustler: ‘What do you think? Not too prurient, is it?’”

After the 1750s, the few people who might know of the word prurient outside of the Miller test might associate it with an “unusual” or “unhealthy” interest in sex.

So people think others (rarely themselves) have “prurient minds,” the scholar pointed out, “when they have an unhealthy interest in sex, and things are prurient when they arouse that sort of interest. But you find a lot of people using prurient just as a vague synonym for ‘lewd’ or ‘erotic.’”

Nunberg illustrates his point with the 1990 2 Live Crew obscenity trial in St. Petersburg, where the prosecutor decided to charge that the rap group with “inciting the crowd to prurient behavior” and with a Massachussets governor’s claim that a new pornography law would protect children from ‘perverted persons who would coerce them into committing prurient acts.”

“Acts and behavior can’t be prurient in and of themselves, not if you use the word correctly. But then it’s unlikely that any of these people ever looked the word up — they just guessed at its meaning on the basis of having seen it in one context, that Supreme Court definition of obscenity.”

In fact, Nunberg wrote in 2002, “that single clause of the Court’s definition accounts for more than half the occurrences of the word in the press.”

To read Geoffrey Nunberg’s commentary on the word “prurient,” click here.



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By XBIZ