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Business Times
11 hours ago
- Business
- Business Times
Trump signs order targeting banks over political discrimination
[NEW YORK] US President Donald Trump signed an executive order on Thursday (Aug 7) aimed at eliminating practices by banks and their regulators that result in certain customers being denied access to financial services for ideological reasons. The order directs federal banking regulators to remove reputational risk standards from their guidance and training materials and identify financial institutions that engaged in unlawful 'debanking' in the past, the White House said in a fact sheet published after the signing. Federal authorities are also directed to impose fines or take other remedial measures they deem appropriate on institutions that are found to have had such policies. And regulators will also be required to review complaint data, and refer instances of unlawful debanking based on religion to the Justice Department. Financial institutions under the jurisdiction of the Small Business Administration will also be required to make reasonable efforts to reinstate clients who were unlawfully denied services. 'President Trump believes that no American should be denied access to financial services because of their political or religious beliefs, and that banking decisions must solely be made on the basis of individualised, objective, and risk-based analyses,' the White House said. Some of the nation's biggest banks have been accused by the Trump administration of shutting customer accounts for political or religious reasons. And many conservatives have complained that major Wall Street firms have debanked gunmakers, fossil-fuel companies, religious groups and cryptocurrency firms. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Trump signed the order alongside an action designed to increase access to alternative assets such as private equity, real estate and cryptocurrency in retirement accounts on Thursday afternoon at the White House. Details of the debanking executive order were reported earlier by Fox Business. Trump earlier this week said that banks had discriminated against him in the past. JPMorgan Chase had asked him to close accounts he held for decades within 20 days, and Bank of America declined his attempt to deposit more than US$1 billion, he said in a CNBC interview. Regulators in the Biden administration had been ordered to 'destroy Trump', the president said. Both JPMorgan and Bank of America have denied rejecting business on ideological grounds. The executive order requires the lenders to examine their processes for deciding whether to close accounts and asks regulators to remove references to so-called 'reputational risk' posed by customers, a practice banks have said that led to decisions not to deal with certain customers or industries. 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 in 2018. Citigroup also announced its own set of restrictions for clients selling guns that year. 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. Then 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. Bills have been reintroduced in Congress this year that would prohibit banks from accessing certain lending programmes if they deny 'fair access' to their services. The 'Fair Access to Banking Act' has gained support from groups in the firearms industry. BLOOMBERG
The Hill
17 hours ago
- Business
- The Hill
Trump signs executive order targeting debanking
President Trump signed Thursday an executive order taking aim at alleged discrimination against conservatives by large banks, directing regulators to investigate and punish financial institutions for 'politicized or unlawful debanking.' Conservatives have long complained that they have been unfairly treated by the banking system, a cause taken up by Trump in his second term. 'Financial institutions have engaged in unacceptable practices to restrict law-abiding individuals' and businesses' access to financial services on the basis of political or religious beliefs or lawful business activities,' Thursday's order reads. 'Such practices are incompatible with a free society and the principle that the provision of banking services should be based on material, measurable, and justifiable risks,' it continues. The order directs banking regulators to investigate and punish financial institutions for debanking as violations under consumer protection laws and the Equal Credit Opportunity Act. It also calls on the Small Business Administration (SBA) to instruct the institutions it oversees to identify and reinstate any clients denied services through a 'politicized or unlawful debanking action.' Banking regulators are also directed to remove 'reputation risk' from guidance used to examine financial institutions, in addition to rescinding or amending regulations that also consider reputation. The issue of debanking — the closure of accounts that banks consider risky, often with little notice or explanation — appears to have taken on a personal note for Trump, who said earlier this week that he was turned away from several major banks, including JPMorgan Chase and Bank of America. 'I'll give you me as an example,' he told CNBC Tuesday. 'I had hundreds of millions. I had many, many accounts loaded up with cash, loaded up with cash, and they told me, 'I'm sorry sir, we can't have you. You have 20 days to get out.'' Concerns about debanking initially emerged on the right in the wake of 'Operation Choke Point,' an Obama-era initiative that discouraged banks from working with 'high-risk' clients, including firearm dealers and payday lenders. Debanking has received new attention in recent months, as the crypto industry has also alleged it was unfairly denied access to the banking system. The industry cheered both the debanking order and a second order signed by Trump on Thursday, allowing 401(k) investors to access crypto, private equity, real estate and other digital and alternative assets. 'Ending the discriminatory practice of debanking lawful crypto companies sends a clear message: the era of 'reputation risk' being used to justify financial exclusion is over,' Blockchain Association CEO Summer Mersinger said in a statement. She also touted the 401(k) order for 'expanding consumer choice and empowering individuals to responsibly build wealth using some of the best-performing assets of the past decade.'
Yahoo
18 hours ago
- Business
- Yahoo
Trump signs executive order putting pressure on big banks over 'politicized debanking'
President Trump signed an executive order on Thursday that ups his administration's scrutiny over whether big banks denied services to consumers and businesses based on political or religious grounds. The action calls for federal bank regulators to investigate if the decisions made by financial institutions to deny access to certain customers were 'politicized or unlawful debanking.' Regulators are also called to review their supervisory data for instances of unlawful debanking based on religion and refer such cases to the Attorney General. Institutions found to have encouraged politicized or unlawful debanking will face remedial actions, including fines or consent decrees, according to the order. The order also calls for bank regulators to strike a particular kind of risk assessment from their guidance and supervision efforts known as reputational risk. Two federal bank regulators — the Federal Reserve and Office of the Comptroller of the Currency — have already eliminated reputational risk as part of their bank examination programs. The Small Business Administration will also be tasked with requiring institutions to take efforts to reinstate customers previously denied services unlawfully. The order did not lay out further details for how the investigative efforts by regulators will unfold, including which lenders these agencies will choose to scrutinize first. The order is another boon to crypto, which during the Biden era, was flagged by regulators as a higher-risk industry for lenders. It also reflects how the president's own interests continue to shape policymaking this year. On Tuesday, President Trump claimed that the country's two largest banks — JPMorgan Chase (JPM) and Bank of America (BAC) discriminated against him and other conservatives by denying them services. He cited his own personal experience as an example. "The banks discriminated against me very badly,' Trump said in a Tuesday morning interview with CNBC's 'Squawk Box.' The president is far from the only entity carrying the Trump name that has claimed denial of banking services. Earlier this year, the Trump Organization sued major credit card lender Capital One (COF) for allegedly debanking hundreds of its accounts following the Jan. 6, 2021, attack on the US Capitol in Washington, D.C. The bank has since said the lawsuit failed to include any facts to back the claim that the moves were politically motivated. For years, conservatives have claimed that US banks have denied accounts to certain customers for political reasons. Crypto companies and their executives have also claimed they have lost or were denied banking services; Coinbase Global executives have shared several accounts. Another criticism heard from both Republican and Democratic lawmakers is that banks can use debanking too aggressively as a legal and reputational risk-management tool when following the broad aim of preventing fraud, money laundering, terrorism, and other crimes. And that, critics have said, has led to incorrectly evicting or refusing customers service. Lawmakers have cited thousands of debanking complaints from consumers in recent years. However, US lenders must follow guidance handed down by regulators that calls for lenders to assess customers based on specific risk criteria, including reputational risk. Arguably, that dynamic gave banks greater discretion when weighing whether customers signaling questionable behavior are too risky to bank. It also grants regulators wider authority to lay out what sort of activity lenders should pay closer attention to. David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. Click here for in-depth analysis of the latest stock market news and events moving stock prices Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19 hours ago
- Business
- Yahoo
Trump expected to sign executive order putting pressure on big banks over 'politicized debanking'
President Trump is expected to sign an executive order on Thursday that ups his administration's scrutiny over whether big banks denied services to consumers and businesses based on political or religious grounds. The action calls for federal bank regulators to investigate if the decisions made by financial institutions to deny access to certain customers were 'politicized or unlawful debanking.' Regulators are also called to review their supervisory data for instances of unlawful debanking based on religion and refer such cases to the Attorney General. Institutions found to have encouraged politicized or unlawful debanking will face remedial actions, including fines or consent decrees, according to the order. The order also calls for bank regulators to strike a particular kind of risk assessment from their guidance and supervision efforts known as reputational risk. Two federal bank regulators — the Federal Reserve and Office of the Comptroller of the Currency — have already eliminated reputational risk as part of their bank examination programs. The Small Business Administration will also be tasked with requiring institutions to take efforts to reinstate customers previously denied services unlawfully. The order did not lay out further details for how the investigative efforts by regulators will unfold, including which lenders these agencies will choose to scrutinize first. The order is also another boon to crypto, which, during the Biden era, was flagged by regulators as a higher-risk industry for lenders. It also reflects how the president's own interests continue to shape policymaking this year. On Tuesday, President Trump claimed that the country's two largest banks — JPMorgan Chase (JPM) and Bank of America (BAC) discriminated against him and other conservatives by denying them services. He cited his own personal experience as an example. "The banks discriminated against me very badly,' Trump said in a Tuesday morning interview with CNBC's 'Squawk Box.' The president is far from the only entity carrying the Trump name that has claimed denial of banking services. Earlier this year, the Trump Organization sued major credit card lender Capital One (COF) for allegedly debanking hundreds of its accounts following the Jan. 6, 2021, attack on the US Capitol in Washington, D.C. The bank has since said the lawsuit failed to include any facts to back the claim that the moves were politically motivated. For years, conservatives have claimed that US banks have denied accounts to certain customers for political reasons. Crypto companies and their executives have also claimed they have lost or were denied banking services; Coinbase Global executives have shared several accounts. Another criticism heard from both Republican and Democratic lawmakers is that banks can use debanking too aggressively as a legal and reputational risk-management tool when following the broad aim of preventing fraud, money laundering, terrorism, and other crimes. And that, critics have said, has led to incorrectly evicting or refusing customers service. Lawmakers have said that there have been thousands of debanking complaints from consumers in recent years. However, US lenders must follow guidance handed down by regulators that calls for lenders to assess customers based on specific risk criteria including reputational race, gender, religion,s and national origin. However, US lenders must follow guidance handed down by regulators that calls for lenders to assess customers based on specific risk criteria, including reputational risk. Arguably, that dynamic gives banks greater discretion when weighing whether customers signaling questionable behavior are too risky to bank. It also grants regulators wider authority to lay out what sort of activity lenders should pay closer attention to. David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. Click here for in-depth analysis of the latest stock market news and events moving stock prices Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19 hours ago
- Business
- Yahoo
Trump expected to sign executive order putting pressure on big banks over 'politicized debanking'
President Trump is expected to sign an executive order on Thursday that ups his administration's scrutiny over whether big banks denied services to consumers and businesses based on political or religious grounds. The action calls for federal bank regulators to investigate if the decisions made by financial institutions to deny access to certain customers were 'politicized or unlawful debanking.' Regulators are also called to review their supervisory data for instances of unlawful debanking based on religion and refer such cases to the Attorney General. Institutions found to have encouraged politicized or unlawful debanking will face remedial actions, including fines or consent decrees, according to the order. The order also calls for bank regulators to strike a particular kind of risk assessment from their guidance and supervision efforts known as reputational risk. Two federal bank regulators — the Federal Reserve and Office of the Comptroller of the Currency — have already eliminated reputational risk as part of their bank examination programs. The Small Business Administration will also be tasked with requiring institutions to take efforts to reinstate customers previously denied services unlawfully. The order did not lay out further details for how the investigative efforts by regulators will unfold, including which lenders these agencies will choose to scrutinize first. The order is also another boon to crypto, which, during the Biden era, was flagged by regulators as a higher-risk industry for lenders. It also reflects how the president's own interests continue to shape policymaking this year. On Tuesday, President Trump claimed that the country's two largest banks — JPMorgan Chase (JPM) and Bank of America (BAC) discriminated against him and other conservatives by denying them services. He cited his own personal experience as an example. "The banks discriminated against me very badly,' Trump said in a Tuesday morning interview with CNBC's 'Squawk Box.' The president is far from the only entity carrying the Trump name that has claimed denial of banking services. Earlier this year, the Trump Organization sued major credit card lender Capital One (COF) for allegedly debanking hundreds of its accounts following the Jan. 6, 2021, attack on the US Capitol in Washington, D.C. The bank has since said the lawsuit failed to include any facts to back the claim that the moves were politically motivated. For years, conservatives have claimed that US banks have denied accounts to certain customers for political reasons. Crypto companies and their executives have also claimed they have lost or were denied banking services; Coinbase Global executives have shared several accounts. Another criticism heard from both Republican and Democratic lawmakers is that banks can use debanking too aggressively as a legal and reputational risk-management tool when following the broad aim of preventing fraud, money laundering, terrorism, and other crimes. And that, critics have said, has led to incorrectly evicting or refusing customers service. Lawmakers have said that there have been thousands of debanking complaints from consumers in recent years. However, US lenders must follow guidance handed down by regulators that calls for lenders to assess customers based on specific risk criteria including reputational race, gender, religion,s and national origin. However, US lenders must follow guidance handed down by regulators that calls for lenders to assess customers based on specific risk criteria, including reputational risk. Arguably, that dynamic gives banks greater discretion when weighing whether customers signaling questionable behavior are too risky to bank. It also grants regulators wider authority to lay out what sort of activity lenders should pay closer attention to. David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
