Latest news with #bankingdiscrimination
Yahoo
a day ago
- Business
- Yahoo
Diane Francis: Trump sets his sights on the banking industry
Last week, U.S. President Donald Trump signed an executive order that aims to prevent banks from discriminating against customers because of their politics, religion or 'lawful business activities,' such as owning crypto assets. He told CNBC that in years past, JPMorgan Chase and other banks have 'discriminated against me very badly, and I was very good to the banks.' Apparently, such complaints are not uncommon. 'Conservatives have said that regulators appointed by President Joe Biden spent past years conscripting banks to target Trump's political opponents. Tech investor and Trump adviser Marc Andreessen had said about 30 founders of tech start-ups were 'de-banked.' He called the project 'Operation Chokepoint 2.0.,' ' read a recent report in the Washington Post. In an attempt to prevent increased scrutiny from the federal government, many banks have increased their lobbying and updated their policies to make it clear that they don't discriminate on the basis of politics or religion. But financial institutions will face future scrutiny. While this is an American initiative, it will affect Canadian banks because of their extensive operations south of the border. Canada's five biggest companies are all banks based in Toronto. Many of them own branches and extensive in assets south of the border. It's hard to believe that there would be a concerted top-down initiative to de-bank customers purely based on politics, but in America's deeply polarized society with its localized banks, this would not be surprising. Moreover, their restrictions on financial and tech startups is understandable and began because two banks specializing in crypto — Silvergate and Signature — went bust in 2023, according to the Washington Post. They failed because they didn't appropriately manage the risks, said Steven Kelly, former associate director of research at the Yale Program on Financial Stability. But Trump's fight with banks that allegedly discriminate against the cryptocurrency industry is also political, as he intends to make America the world's crypto capital. Trump's crypto business has boomed and is worth billions. Currently, Canadian banks are gun-shy about crypto, but they may now be forced to start dealing with crypto startups, at least in the U.S. However, Canada's foreign ownership restrictions may prove to be an a bigger challenge, for both Ottawa and the Big Five banks. Trump has publicly, and incorrectly, claimed that Canadian restrictions mean that American banks are forbidden from operating in Canada. 'Canada doesn't allow American Banks to do business in Canada, but their banks flood the American Market. Oh, that seems fair to me, doesn't it?' Trump wrote on social media in March. That's untrue. There are 16 U.S.-based bank subsidiaries operating in Canada with billions in assets, according to the Canadian Bankers Association. But American banks operating in Canada are heavily regulated and somewhat restricted when it comes to providing retail banking services to consumers. It seems clear that Trump wants to eliminate all barriers to entry so that American banks can directly compete in Canada against local banks and offer the same services that Canadian banks provide. So stay tuned. Trump has never let the facts get in the way of a policy. Sign in to access your portfolio
Yahoo
5 days ago
- Business
- Yahoo
Trump's latest executive order banning 'debanking' takes aim at an industry that cheered his return
A new executive order from President Donald Trump targets banks he believes are denying services to conservatives. Trump told CNBC on Tuesday that JPMorgan and Bank of America have refused to accept his deposits. Crypto-connected Trump supporters like Marc Andreessen made debanking a rallying cry in 2024. President Donald Trump made his feud with big banks official. After making his grievances against banks clear earlier in the week, Trump signed an executive order for federal banking regulators to eliminate guidance that encourages what he calls "politicized" or "unlawful" debanking. According to the executive order and a White House fact sheet, the order requires various federal regulators and agencies to "make reasonable efforts" to reinstate debanked customers. The Treasury Department is tasked with creating a strategy and new regulations to prevent "unlawful" debanking, while the Attorney General would oversee and investigate cases of people suspected of being debanked in discriminatory ways. The Trump Organization and Eric Trump sued Capital One earlier this year for closing accounts in the wake of the January 6, 2021, riot. Capital One has denied wrongdoing, and litigation is ongoing. Earlier this week, Trump told CNBC's "Squawk Box" in an interview that Bank of America and JPMorgan Chase had previously refused to accept his deposits. "They totally discriminate against, I think, me maybe even more, but they discriminate against many conservatives," he told show host Andrew Ross Sorkin. "I think the word might be 'Trump supporters' more than conservatives." In a statement to Reuters, JPMorgan said it doesn't close accounts for political reasons, while Bank of America did not address Trump's claims. In January at the World Economic Forum in Davos, Trump claimed Bank of America and other banks were refusing to accept conservative customers, which the Charlotte-based lender denied. Prior to the inauguration, crypto-connected supporters of the president turned debanking into a political issue. Well-known venture capitalist Marc Andreessen said on Joe Rogan's podcast that dozens of tech founders had been cut off from banking services during former President Joe Biden's administration. Banks are just the latest industry to draw the president's ire, despite the fact that the securities and investment industry gave more to Trump than his opponent, former Vice President Kamala Harris, according to political donation tracker OpenSecrets. Trump's cabinet also includes Howard Lutnick, a banker who ran Cantor Fitzgerald before becoming the Secretary of Commerce. The executive order could result in fines for banks found to have discriminated against conservatives, mimicking the White House's tactics for punishing other industries. Trump started his year by pulling funding from elite higher education institutions that he accused of condoning discrimination on campus. He soon pivoted to an ongoing legal battle with the country's biggest law firms, some of whom have represented clients in court cases against him. Then, as his tariff policies intensified, Trump went after the likes of Amazon and Walmart for potentially being explicit about how these trade barriers would drive up prices for US consumers. More recently, Big Pharma executives woke up one morning to a letter from the president, threatening them to lower the prices of drugs. Capitol One and the Bank of America did not immediately respond to requests for comments. Read the original article on Business Insider Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Trump's latest executive order banning 'debanking' takes aim at an industry that cheered his return
A new executive order from President Donald Trump targets banks he believes are denying services to conservatives. Trump told CNBC on Tuesday that JPMorgan and Bank of America have refused to accept his deposits. Crypto-connected Trump supporters like Marc Andreessen made debanking a rallying cry in 2024. President Donald Trump made his feud with big banks official. After making his grievances against banks clear earlier in the week, Trump signed an executive order for federal banking regulators to eliminate guidance that encourages what he calls "politicized" or "unlawful" debanking. According to the executive order and a White House fact sheet, the order requires various federal regulators and agencies to "make reasonable efforts" to reinstate debanked customers. The Treasury Department is tasked with creating a strategy and new regulations to prevent "unlawful" debanking, while the Attorney General would oversee and investigate cases of people suspected of being debanked in discriminatory ways. The Trump Organization and Eric Trump sued Capital One earlier this year for closing accounts in the wake of the January 6, 2021, riot. Capital One has denied wrongdoing, and litigation is ongoing. Earlier this week, Trump told CNBC's "Squawk Box" in an interview that Bank of America and JPMorgan Chase had previously refused to accept his deposits. "They totally discriminate against, I think, me maybe even more, but they discriminate against many conservatives," he told show host Andrew Ross Sorkin. "I think the word might be 'Trump supporters' more than conservatives." In a statement to Reuters, JPMorgan said it doesn't close accounts for political reasons, while Bank of America did not address Trump's claims. In January at the World Economic Forum in Davos, Trump claimed Bank of America and other banks were refusing to accept conservative customers, which the Charlotte-based lender denied. Prior to the inauguration, crypto-connected supporters of the president turned debanking into a political issue. Well-known venture capitalist Marc Andreessen said on Joe Rogan's podcast that dozens of tech founders had been cut off from banking services during former President Joe Biden's administration. Banks are just the latest industry to draw the president's ire, despite the fact that the securities and investment industry gave more to Trump than his opponent, former Vice President Kamala Harris, according to political donation tracker OpenSecrets. Trump's cabinet also includes Howard Lutnick, a banker who ran Cantor Fitzgerald before becoming the Secretary of Commerce. The executive order could result in fines for banks found to have discriminated against conservatives, mimicking the White House's tactics for punishing other industries. Trump started his year by pulling funding from elite higher education institutions that he accused of condoning discrimination on campus. He soon pivoted to an ongoing legal battle with the country's biggest law firms, some of whom have represented clients in court cases against him. Then, as his tariff policies intensified, Trump went after the likes of Amazon and Walmart for potentially being explicit about how these trade barriers would drive up prices for US consumers. More recently, Big Pharma executives woke up one morning to a letter from the president, threatening them to lower the prices of drugs. Capitol One and the Bank of America did not immediately respond to requests for comments. Read the original article on Business Insider 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
5 days ago
- Business
- Yahoo
Trump orders federal regulators to probe alleged bank discrimination against conservatives
NEW YORK (AP) — President Donald Trump on Thursday signed an executive order mandating a probe into whether banks have discriminated against conservatives and certain industries like gun manufacturers and cryptocurrency companies, invoking the vast powers to go after entities that the Republican president alleges have discriminated against him and his allies. The executive order deals with an issue known as 'debanking,' which is when banks close accounts of individuals or declines to go into business with certain industries. Trump has accused JPMorgan and Bank of America of debanking him and his companies in the past, something both banks have denied. Trump ordered federal bank regulators to make sure banks do not discriminate against individuals or companies for their political or religious beliefs. He also ordered bank regulators to probe when banks may have allegedly discriminated and refer the cases to the Department of Justice. The move could open banks to potential civil or criminal investigations, fines or punishments. When Trump and his party discuss debanking, they typically refer to banks closing the accounts of a person or company when they no longer want to do business with them. Banks usually say they close accounts or deny loans because the person or business is deemed too risky. The banking industry has long argued that it has a constitutional right to choose whom they go into business with, if it does not violate laws like the Equal Credit Opportunity Act. Th act, which was part of several pieces of legislation signed during the Civil Rights Movement, bans banks from discrimination based on race, ethnicity, religion, sex and other protected statuses. Another type of debanking is when government regulators tell banks to avoid doing business with industries or individuals. Democratic President Barack Obama's Department of Justice told banks to avoid doing business with 'high risk' industries, which included payday lenders and firearms manufacturers. This type of government-directed debanking is also known as reputational risk, where the historic reputation of an industry prompts banks to be more careful about banking and lending. Historic examples include entities who did business in high-risk countries, did business largely in cash or were repeatedly flagged by bank regulators. Conservatives have argued that reputational risk has become an umbrella term that allows banks to discriminate. The banking industry insists it does not actively debank and does not target specific industries or individuals. Banks have already been removing any mention of reputational risk from their policies and procedures, particularly since Trump returned to the White House. 'We don't close accounts for political reasons, and we agree with President Trump that regulatory change is desperately needed,' said a spokeswoman for JPMorgan Chase. The Obama administration's government-directed debanking has been a rallying cry for conservatives. It's one reason why the cryptocurrency industry backed Trump in 2024. While the Biden administration did not explicitly force banks to debank the crypto industry, Democratic President Joe Biden's bank regulators did express some public concern about it, a move that was read by banks as a reason to steer away from crypto. That phrasing by the Biden administration was often referred to as 'Operation Choke Point 2.0' by Trump and his allies. Republicans have introduced legislation to cut down on alleged acts of debanking as well. Sen. Tim Scott of South Carolina, chair of the Senate Banking Committee, has introduced legislation that would require bank regulators to no longer consider reputational risk as a factor in how they measure a bank's health and risk profile. Ken Sweet, The Associated Press 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
Associated Press
5 days ago
- Business
- Associated Press
Trump orders federal regulators to probe alleged bank discrimination against conservatives
NEW YORK (AP) — President Donald Trump on Thursday signed an executive order mandating a probe into whether banks have discriminated against conservatives and certain industries like gun manufacturers and cryptocurrency companies, invoking the vast powers to go after entities that the Republican president alleges have discriminated against him and his allies. The executive order deals with an issue known as 'debanking,' which is when banks close accounts of individuals or declines to go into business with certain industries. Trump has accused JPMorgan and Bank of America of debanking him and his companies in the past, something both banks have denied. Trump ordered federal bank regulators to make sure banks do not discriminate against individuals or companies for their political or religious beliefs. He also ordered bank regulators to probe when banks may have allegedly discriminated and refer the cases to the Department of Justice. The move could open banks to potential civil or criminal investigations, fines or punishments. When Trump and his party discuss debanking, they typically refer to banks closing the accounts of a person or company when they no longer want to do business with them. Banks usually say they close accounts or deny loans because the person or business is deemed too risky. The banking industry has long argued that it has a constitutional right to choose whom they go into business with, if it does not violate laws like the Equal Credit Opportunity Act. Th act, which was part of several pieces of legislation signed during the Civil Rights Movement, bans banks from discrimination based on race, ethnicity, religion, sex and other protected statuses. Another type of debanking is when government regulators tell banks to avoid doing business with industries or individuals. Democratic President Barack Obama's Department of Justice told banks to avoid doing business with 'high risk' industries, which included payday lenders and firearms manufacturers. This type of government-directed debanking is also known as reputational risk, where the historic reputation of an industry prompts banks to be more careful about banking and lending. Historic examples include entities who did business in high-risk countries, did business largely in cash or were repeatedly flagged by bank regulators. Conservatives have argued that reputational risk has become an umbrella term that allows banks to discriminate. The banking industry insists it does not actively debank and does not target specific industries or individuals. Banks have already been removing any mention of reputational risk from their policies and procedures, particularly since Trump returned to the White House. 'We don't close accounts for political reasons, and we agree with President Trump that regulatory change is desperately needed,' said a spokeswoman for JPMorgan Chase. The Obama administration's government-directed debanking has been a rallying cry for conservatives. It's one reason why the cryptocurrency industry backed Trump in 2024. While the Biden administration did not explicitly force banks to debank the crypto industry, Democratic President Joe Biden's bank regulators did express some public concern about it, a move that was read by banks as a reason to steer away from crypto. That phrasing by the Biden administration was often referred to as 'Operation Choke Point 2.0' by Trump and his allies. Republicans have introduced legislation to cut down on alleged acts of debanking as well. Sen. Tim Scott of South Carolina, chair of the Senate Banking Committee, has introduced legislation that would require bank regulators to no longer consider reputational risk as a factor in how they measure a bank's health and risk profile.
