Trump Says JPMorgan, Bank of America Refused His Business

Yahoo

a day ago

(Bloomberg) -- President Donald Trump accused two of the nation's largest banks of rejecting his business, following as his administration was preparing an executive order threatening financial institutions who refused to work with certain customers on ideological grounds.
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'The banks discriminated against me very badly,' Trump said in an interview Tuesday with CNBC.
Trump said he had been 'informed by my people' that JPMorgan Chase & Co. had asked him to close accounts he held for decades within 20 days, and that Bank of America Corp. declined his attempt to deposit more than $1 billion with their company.
'I ended up going to small banks all over the place,' Trump said.
The president added that he believed banking regulators during the Biden administration had been ordered to 'do everything you can to destroy Trump, and that's what they did.'
'Banks are not afraid of anything but a regulator — their regulators and their wives,' Trump said.
He didn't offer exact dates for his dealings with JPMorgan and Bank of America, though he suggested the latter occurred between his two presidential terms.
The defeat in New York's civil fraud suit against Trump and his real estate company last year put restrictions on his ability to do business in the state. That included a three-year ban on the Trump Organization getting loans from New York-chartered banks. Trump has asked a Manhattan appeals court to overturn the civil fraud verdict.
Trump was asked on Tuesday about a Wall Street Journal report that his administration was drafting an order that would direct bank regulators to investigate whether any financial institutions might have violated federal laws in closing certain accounts.
Any direction from the White House would require both banks and regulators to review and submit their findings of how they engage with their customers.
In the draft of the executive order being circulated among industry participants, banks would undergo a 120-day review process of their rationale for closing customer accounts, the people familiar with the matter said. Financial regulators would also undergo their own review process, between 120 and 180 days, to examine how they regulate and impose restrictions on banks that could lead to account closures, the people said, asking not to be identified discussing nonpublic information.
The order also would call for any criminal findings that come from the review process to be submitted directly to the Department of Justice, said the people. A final executive order is expected to be submitted at some point this week, though timing and the material itself could change, they added.
A representative for the White House did not immediately respond to a request for comment.
Both JPMorgan and Bank of America have previously denied rejecting business on ideological grounds.
'Desperately Needed'
'We don't close accounts for political reasons, and we agree with President Trump that regulatory change is desperately needed,' Trish Wexler, a JPMorgan spokesperson, said in a statement. 'We commend the White House for addressing this issue and look forward to working with them to get this right.'
'We welcome the Trump administration's efforts to provide regulatory clarity to banks,' Bank of America spokesperson William Halldin said in a statement. 'We've provided detailed proposals and will continue to work with the administration and Congress to improve the regulatory framework.'
The Bank Policy Institute also said rules need to be reworked.
'The heart of the problem is regulatory overreach and supervisory discretion,' Austin Anton, a Bank Policy Institute spokesperson, said Tuesday. 'The banking agencies have already taken steps to address issues like reputational risk, and we're hopeful that any forthcoming executive order will reinforce this progress by directing regulators to confront the flawed regulatory framework that gave rise to these concerns in the first place.'
Federal banking regulators have said they'll remove reputation risk from their bank exams, aiming to eliminate a factor that lenders have blamed for forcing them to exit some client relationships.
Conservatives have complained that major Wall Street firms have debanked gunmakers, fossil-fuel companies, religious groups and cryptocurrency firms. Trump aired that complaint to Bank of America Chief Executive Officer Brian Moynihan directly during a panel at the World Economic Forum in Davos earlier this year.
'We serve more than 70 million clients and we welcome conservatives. We are required to follow extensive government rules and regulations that sometimes result in decisions to exit client relationships,' a representative for Bank of America said in an emailed statement at the time. 'We never close accounts for political reasons and don't have a political litmus test.'
Bank of America, the second-largest US bank, had restricted lending to companies that make assault-style guns used for non-military purposes, following shootings at a high school in Florida early in 2018. Citigroup Inc. also announced its own set of restrictions for clients selling guns that year.
In June, Citigroup ended a seven-year policy that placed restrictions on firearms sales by its retail sector clients, citing recent legislative developments and concerns over access to banking services.
The Trump Organization sued Capital One Financial Corp. in March, accusing it of closing hundreds of the real estate company's accounts in 2021 for political reasons.
The president's company claims the bank ended the decades-old relationship 'simply because Capital One believed that the political views at the time favored doing so.'
In a setback for Trump's company, a federal judge in July granted Capital One's request to delay the exchange of evidence in the case until after the bank's motion to dismiss is resolved. Capital One argues its agreements with the Trump Organization allowed it to close its accounts for any reason and that it gave the business plenty of advanced notice. The bank also says Trump's company has failed to provide any evidence that the accounts were closed for political purposes.
Earlier this year JPMorgan Chase & Co.'s Jamie Dimon on Capitol Hill offered his support to a restructuring of US financial regulators.
Bank of America went on to loosen its gun restrictions and made similar changes to its energy-lending policies, including dropping a blanket ban on financing for Arctic drilling, according to an environmental and social risk policy from late 2023.
The issue of debanking customers has come up outside of the US as well. In the UK, it prompted an outcry a few years ago, when right-wing politician Nigel Farage — who now leads the Reform UK party — revealed NatWest Group Plc's upmarket Coutts unit had closed his account, saying his political views were a factor in that decision.
The subsequent row led to the resignation of the bosses of NatWest and Coutts, while Farage had vowed to campaign for others who were been 'debanked' on questionable grounds. A preliminary review by the UK's Financial Conduct Authority found no evidence that banks were dropping customers for their political opinion.
--With assistance from Hannah Levitt, Erik Larson and Hadriana Lowenkron.
(Updates with details on draft executive order in paragraphs 10-13)
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