President Trump signed an executive order Thursday aimed at preventing banks from refusing to offer financial services to people based on their political beliefs or lawful business activities – a practice known as “debanking.”
“It is the policy of the United States that no American should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations, or political views, and to ensure that politicized or unlawful debanking is not used as a tool to inhibit such beliefs, affiliations, or political views,” Trump wrote in his order.
“Banking decisions must instead be made on the basis of individualized, objective, and risk-based analyses,” he added.
Earlier this week, Trump accused JPMorgan Chase and Bank of America of rejecting more than $1 billion of his deposits for political reasons.
“The banks discriminated against me very badly,” he told CNBC on Tuesday.
Former Republican Kansas Gov. Sam Brownback recently alleged he was “debanked” by JPMorgan over his conservative religious views – a claim the bank denied.
Banks have also been accused of canceling accounts of customers engaged in cryptocurrency ventures and supporting conservative causes, such as Second Amendment activities.
Trump noted that victims of debanking have “suffered frozen payrolls, debt and crushing interest, and other significant harms to their livelihoods, reputations, and financial well-being.”
“Such practices are incompatible with a free society and the principle that the provision of banking services should be based on material, measurable, and justifiable risks,” the president continued, describing discriminatory debanking as “unlawful.”
Trump’s order directs banking regulators to remove reputational risk and other equivalent concepts from federal guidelines and instructs the Small Business Administration to require all financial institutions to make reasonable efforts to reinstate anyone who was unlawfully debanked.
The president further ordered Treasury Secretary Scott Bessent to develop a comprehensive strategy to combat debanking, through legislation or new regulations.
Banks found to have engaged in discriminatory debanking may be subject to fines or other penalties from regulators, the order stated.
Trump also directed banking regulators to review complaints and data related to debanking and refer potentially unlawful cases to the Justice Department.
Major banking groups applauded Trump’s executive action.
“Today’s Executive Order helps ensure all consumers and businesses are treated fairly, a goal the nation’s banks share with the Administration,” the Bank Policy Institute, American Bankers Association, Consumer Bankers Association and Financial Services Forum said in a joint statement.
“It’s in banks’ best interest to take deposits, lend to and support as many customers as possible,” the groups said. “Unfortunately, regulatory overreach, supervisory discretion and a maze of obscure rules have stood in the way as the E.O. makes clear.”
“We thank the Administration for its efforts to protect access to banking and rein in runaway regulations and look forward to working with the White House, Congress and the agencies to create a national standard that advances these goals.”
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