diff --git a/src/bind_faction.c b/src/bind_faction.c
index 9cc6bdd97..518dddc27 100644
--- a/src/bind_faction.c
+++ b/src/bind_faction.c
@@ -383,7 +383,8 @@ static int tolua_faction_set_password(lua_State * L)
 {
     faction *self = (faction *)tolua_tousertype(L, 1, NULL);
     const char * passw = tolua_tostring(L, 2, NULL);
-    faction_setpassword(self, password_hash(passw, PASSWORD_DEFAULT));
+    faction_setpassword(self, 
+      passw ? password_hash(passw, PASSWORD_DEFAULT) : NULL);
     return 0;
 }
 
diff --git a/src/kernel/faction.c b/src/kernel/faction.c
index fc1de186a..238ba834b 100755
--- a/src/kernel/faction.c
+++ b/src/kernel/faction.c
@@ -564,8 +564,12 @@ const char *faction_getpassword(const faction *f) {
 
 void faction_setpassword(faction * f, const char *pwhash)
 {
-    assert(pwhash);
-    f->password_id = dbstring_save(pwhash);
+    if (pwhash) {
+        f->password_id = dbstring_save(pwhash);
+    }
+    else {
+        f->password_id = 0;
+    }
 }
 
 bool valid_race(const struct faction *f, const struct race *rc)