President Donald Trump is expected to sign an executive order Thursday that would punish banks for restricting services to customers based on their political or religious beliefs, formalizing “debanking” protections that conservatives and crypto industry advocates have been pushing for.
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 is an umbrella term for when a bank rejects a customer, which can happen for any number of reasons. Americans don’t have a legal right to a bank account, and lenders often turn away people or businesses to comply with a mountain of rules and regulations designed to protect the financial system.
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.
But more 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.
Major banks have repeatedly denied accusations that they have systemically targeted conservative groups, but in recent weeks many have responded by saying they welcome the president’s efforts to scale back regulations.
Still, Trump has doubled down on these perceived injustices and even claimed this week to have been a victim of debanking himself.
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,” the president told CNBC.
A 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.”
A Bank of America spokesperson declined to comment on Trump’s allegation, but CEO Brian Moynihan also praised Trump for addressing the regulations in place, telling CNBC in an interview that “the president’s on the right issue.”
This is a developing story and will be updated.
For more CNN news and newsletters create an account at CNN.com
