[gaadd33]

I don't see how setting business rules means that they aren't using a cryptographic hash. Can you explain why that has to be true?

Perhaps eliminating a frequently made mistake by people who don't have much computer expertise is the reason. Wouldn't it be possible that they have found that a large number of support requests for newly created accounts are due to people accidentally adding spaces? So by eliminating spaces, they can still hash the contents without a problem however they also reduce the support load and increase the usability by a subset of their users.