US President Donald Trump says he plans to sign an executive order to formally put an end to “Debanking” in the US. The bill would punish banks for restricting services to customers based on their political or religious beliefs.
The order directs federal banking regulators to remove the “reputational risk” language from their guidance to lending institutions — a broad concept that crypto and other businesses say led mainstream lenders to ice them out. It also instructs regulators to review banks’ past or current policies “encouraging politicized or unlawful debanking,” according to a senior White House official. Debanking has long caused problems for undocumented people and poor Americans, who often have to resort to unregulated payday lenders with much higher interest rates to make ends meet. Recently, the term has been used by conservative groups that claim they are victims of a left-wing value system that’s taken root across Corporate America.
The Trump crypto debanking order targets what critics are calling “Operation Chokepoint 2.0,” which is the alleged systematic denial of banking services to crypto firms during the Biden administration. Banking regulators would be directed to examine potential violations of equal credit laws and also consumer protection regulations, with violating institutions facing financial penalties along with enforcement actions.
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On Tuesday, Trump accused JPMorgan Chase and Bank of America of rejecting his business after his first term ended. “The banks discriminated against me very badly, and I was very good to the banks,” he told CNBC. Meanwhile JPMorgan spokesperson on Tuesday reiterated the bank’s statement that it doesn’t close accounts for political reasons but said it agrees with President Trump that “regulatory change is desperately needed.”