US President Donald Trump has ordered regulators to investigate the alleged refusal among US banks to supply accounts to customers on the basis of their political or religious beliefs.
In an executive order signed Thursday, Trump accused federal banking regulators of presiding over an unlawful discrimination campaign under the guise of risk management, echoing allegations leveled previously by members of conservative groups and the cryptocurrency sector.
“Bank regulators have used supervisory scrutiny and other influence over regulated banks to direct or otherwise encourage politicized or unlawful debanking activities,” the order states. “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.”
The order requires banking regulators to conduct an investigation into instances of politically-motivated discrimination. If banks are found to have discriminated in this manner, regulators are to levy fines, consent decrees, and other unspecified “disciplinary measures,” the executive order states.
To prevent similar alleged discrimination recurring in future, the order also demands that regulators disallow banks from considering “reputation risk” when fielding applications from prospective customers. In anticipation of this measure, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC), the regulatory agencies responsible for the stability of the US banking system, had already moved to drop reputation risk as a component of their examination processes.
The order is the latest in a series of steps taken by Republicans since Trump returned to office to end the alleged discrimination by banks. In February, congressional subcommittees held multiple hearings on the topic of debanking. The following month, Republican members of the Senate sponsored the FIRM Act—which has not yet been put to a vote—aiming to prohibit banks from factoring in “reputation risk” when making decisions about customers. Trump has also appointed Jonathan Gould, former counsel to crypto firm Bitfury, as head of the OCC, and long-time regulator Travis Hill as acting chairman of the board of directors the FDIC.
Although the executive order does not refer explicitly to crypto, it has been interpreted in corners of the industry—which has formed a profitable alliance with Trump of late—as a long overdue concession to its own banking struggles.
For years, the crypto industry has complained about US banks refusing to provide them with loans and checking accounts. Without a US bank account, crypto firms cannot readily accept dollars in exchange for services, store and earn interest on funds raised from investors, pay employees or vendors, or perform other fundamental business activities.
In early 2023, following the lead of crypto venture capitalist Nic Carter, industry figures began to allege foul play. Under the Biden administration, they claimed, the Federal Reserve, FDIC, and OCC pressured banks into refusing to serve the crypto industry. They did so by issuing informal guidance, thereby skirting the public consultation process required to instate formal policy, crypto figures have alleged.