Trump signs executive order to curb de-banking practices

President Trump has signed an Executive Order to ensure federal regulators do not promote policies that allow financial institutions to deny or restrict services based on political beliefs, religious beliefs, or lawful business activities—securing fair access to banking for all Americans.

“Bank regulators have used supervisory scrutiny and other influence over regulated banks to direct or otherwise encourage politicized or unlawful debanking activities,” the Executive Order states. “‘Operation Chokepoint’ for example, was a well-documented and systemic means by which Federal regulators pushed banks to minimize their involvement with individuals and companies engaged in lawful activities and industries disfavored by regulators based on factors other than individualized, objective, risk-based standards.”

The Trump E.O. targets practices that “further undermine public trust in banking institutions and their regulators, discriminate against political beliefs and free expression of those beliefs, and weaponize a politicized regulatory state.” 

• The Order directs Federal banking regulators to remove reputational risk and other equivalent concepts that enable politicized or unlawful debanking from their guidance, examination manuals and other materials. 
• The Order instructs the Small Business Administration to require all financial institutions subject to its jurisdiction to make reasonable efforts to reinstate clients and potential clients previously denied services due to unlawful debanking.
• The Order directs the Secretary of the Treasury, in consultation with the Assistant to the President for Economic Policy, to develop a comprehensive strategy to further combat politicized or unlawful debanking activities, including potential legislative or regulatory solutions. 
• The Order requires Federal banking regulators to review financial institutions for past or current policies encouraging politicized or unlawful debanking and take remedial actions, including fines or consent decrees.
• The Order further requires Federal banking regulators to review supervisory and complaint data for instances of unlawful debanking based on religion and refer such cases to the Attorney General. 

Read the complete Executive Order, “Guaranteeing Fair Banking for All Americans.”

“The banking industry should not be a venue for the advancement of biased political agendas and social policy experiments,” said TBA’s President and CEO Chris Furlow. “We appreciate the President’s focus on ‘individualized, objective, risk-based standards,’ which should be the true benchmark.”