- The order instructs regulators to review banks for past or current “debanking” practices, and eliminate rules discouraging service for non-financial reasons.
- While most banks already have policies for closing accounts based on financial risk, the order increases pressure on institutions to justify such decisions.
U.S. President Donald Trump has signed an executive order requiring banks and their regulators to ensure that customers are not denied services based on political or religious beliefs. The move follows repeated claims by conservatives that they have been unfairly targeted by the financial sector.
According to Reuters, the order directs regulators to review the banks they supervise for any past or current “debanking” practices and impose fines or other penalties where violations are found. It also calls on agencies to eliminate any rules or internal guidance that could discourage lenders from serving customers for reasons unrelated to financial risk. Regulators reportedly have 180 days to complete the reviews.
Two banking sources said the measure largely met industry expectations, though questions remain about how regulators will interpret the new requirements and how banks will adjust their compliance procedures.
“Most banks already have policies covering when they decline or close accounts, typically focusing on money laundering or solvency concerns,” David Sewell, partner at Freshfields, commented for Reuters. “Today’s order puts increased pressure on those policies.”
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Political Claims And Bank Responses
In an interview earlier this week, Trump claimed without evidence that JPMorgan Chase and Bank of America refused to accept his deposits after his first term. JPMorgan said it does not close accounts for political reasons, while Bank of America said it does not comment on client matters and would welcome clearer regulatory rules.
The order also alleges that some financial institutions took part in “government-directed surveillance programs” against conservatives after the January 6, 2021, Capitol riot. It said such actions conflict with the principle that banking services should be provided based on measurable and justifiable risks.
Large banks have long denied refusing services on political grounds, pointing instead to regulatory pressures that limit engagement with certain industries. In a joint statement, major banking associations welcomed the Trump administration’s move, saying it could provide clearer rules and ease what they describe as excessive oversight
