Trump to punish banks for dropping customers

Telegraph

2 days ago

Donald Trump is preparing to punish big banks over their alleged discrimination against conservative customers.
The White House is drafting an executive order that will impose penalties on financial institutions for dropping customers based on political grounds.
A draft of the order, which was seen by the Wall Street Journal, directs regulators to investigate whether any financial institutions breach the Equal Credit Opportunity Act, antitrust laws or consumer financial protection laws.
Under the order, which could be signed as early as this week, violators face severe monetary penalties and other disciplinary measures.
It also calls on regulators to strike policies that might have contributed to banks dropping certain customers – a practice known as debanking.
In the UK, the debanking of Nigel Farage, the Reform leader, by Coutts in the summer of 2023 led to a national scandal.
His accounts were closed down after the private bank, which serves the Royal family, decided his views 'do not align with our values' and that he posed a 'reputational risk'.
A dossier – which Mr Farage described as a 'Stasi-style surveillance report' – later revealed the bank had cited his Brexit comments, his closeness with Mr Trump and his views on LGBT rights among many reasons he was not 'compatible with Coutts'.
NatWest, which owns Coutts, paid Mr Farage an undisclosed sum in March this year to settle the long-running dispute.
US banks have been fearful about being the next target of the Trump administration, following his attacks on universities and big law firms.
The draft executive order did not name a specific bank, however Mr Trump in January accused the CEOs of JP Morgan Chase and the Bank of America, the largest US banks, of refusing to provide services for conservatives.
Both banks denied making banking decisions based on politics.
'Woke capitalism'
The criticism of Wall Street giants comes amid growing accusations from conservatives that financial institutions were engaging in 'woke capitalism' and unfairly cutting ties with businesses perceived to be aligned with the political right.
Cryptocurrency companies have also said they were shut out of banking services under the Biden administration.
Banks have said their decisions are based on financial, legal or reputational risks.
In March, the Trump Organisation, which serves as a holding company for most of Mr Trump's business and investments, said it was 'debanked' by Capital One, America's ninth largest bank.
The conglomerate sued the bank, alleging it was guilty of 'egregious conduct' by closing more than 300 of its accounts – which it called a 'clear attack on free speech and free enterprise'.
The Trump administration is pursuing a broad reform agenda aimed at modifying rules governing financial institutions, including capital requirements, arguing that such action will boost economic growth and unleash innovation.