Trump Asks Federal Regulators to Investigate Alleged “Debanking” of Conservatives

President Donald Trump has signed a new executive order asking federal bank regulators to investigate whether banks have been unfairly closing accounts or refusing services to conservatives and certain industries. These industries include gun manufacturers and cryptocurrency companies, which Trump says have been targeted in recent years.

The issue at the center of the order is something called “debanking.” This happens when a bank closes an account or refuses to do business with a person or company. Banks say they usually make these decisions based on financial risk, not politics. But Trump and many conservatives believe that some people and industries are being singled out because of their political or religious beliefs.

Under the new order, federal regulators must make sure banks are not discriminating for these reasons. They are also required to investigate any cases where this might have happened and send their findings to the Department of Justice within 120 days. If banks are found guilty, they could face civil or criminal investigations, fines, or other penalties.

Trump has made this issue personal, claiming that after he left office in 2021, major banks like JPMorgan and Bank of America stopped doing business with him. Both banks deny making decisions based on politics. JPMorgan even stated it agrees that changes to banking regulations are needed.

This debate over debanking is not new. During President Barack Obama’s administration, government regulators told banks to avoid “high-risk” industries such as payday lenders and firearms manufacturers. This practice was called “reputational risk,” meaning banks could choose to avoid certain businesses because of how they might be perceived. Conservatives argue that this policy has been used as an excuse to discriminate.

The banking industry says it does not target people or industries unfairly, but many banks have recently removed the term “reputational risk” from their policies, especially since Trump returned to the White House.

Trump’s stance on the issue has earned him support from the cryptocurrency industry. While President Joe Biden’s administration did not directly order banks to avoid crypto companies, some of his regulators made public comments expressing concern. Banks saw these remarks as a signal to limit their work with the industry, a move Trump’s allies have called “Operation Choke Point 2.0.”

Some Republicans in Congress are also taking action. Senator Tim Scott of South Carolina has introduced a bill that would stop regulators from using reputational risk when assessing the safety and performance of banks.

Trump and his supporters say the goal is simple: to make sure all customers and businesses are treated fairly, no matter their political beliefs. The banking industry says it shares that goal, but how this investigation plays out could shape the future of how banks choose their customers.

Financial institutions like B. Riley Financial Inc. (NASDAQ: RILY) will be watching how this new dynamic plays out as it could reshape how the financial sector operates.

About BillionDollarClub

BillionDollarClub (“BDC”) is a specialized communications platform with a focus on the biggest and brightest companies covered by IBN. It is one of 70+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, BDC is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists, and the general public. By cutting through the overload of information in today’s market, BDC brings its clients unparalleled recognition and brand awareness.

BDC is where breaking news, insightful content and actionable information converge.

To receive SMS alerts from BillionDollarClub, text “Billion” to 888-902-4192 (U.S. Mobile Phones Only)

For more information, please visit https://www.BillionDollarClub.com

Please see full terms of use and disclaimers on the BillionDollarClub website applicable to all content provided by BDC, wherever published or re-published: https://www.BillionDollarClub.com/Disclaimer

BillionDollarClub
Los Angeles, CA
www.BillionDollarClub.com
310.299.1717 Office
Editor@BillionDollarClub.com

BillionDollarClub is powered by IBN