It sounds like the payment processors aren't well-equipped to know what item counts as illegal content or not, and that relying on the reckons of some evangelical activist group with a history of homophobia is predictably terrible option. I suppose other than the expensive and years-long task of developing significant domain expertise themselves, payment processors would probably like instead to defer their decisions to some other legal entity, perhaps some kind of government-funded organisation.

With the surge in anti-gay 'groomer' conspiracy theories now retargeted towards trans people comprising much of the electoral campaign of the incumbent president, it is hard to imagine a less appropriate climate for a US government to create anything to fill that gap.