New rules are being drafted in the US to make sure that individuals and businesses are not targeted with financial blacklisting for reasons unrelated to finance – including for their political persuasions.
The legal initiative is being developed by the Office of the Comptroller of the Currency and is now a subject of public debate at Regulations.gov.
The issue of banks blocking financial assets for political reasons is not a new problem in the US, having been present over the past five or so years, the frequency and severity of the problem causing organizations like the Electronic Frontier Foundation (EFF) to speak up against the practice, especially in cases when banks and online payment processors acts as “de facto internet censors” – to aid in deplatforming individuals and organizations.
If the current plans come to pass, this would be made much more difficult, with the authorities demanding that banks exercise both due diligence and sound judgment before succumbing to pressure, or seeking to avoid risk to their own business at any cost, disregarding interests of their clients both in instances of political interference, and because a customer might “fall into a category that on its face appears to carry an elevated level of risk.”
Initiatives for this type of financial blacklisting often come from political opponents, activists, and media outlets reaching for financial blacklisting as a weapon.
In fact, one of them had to do with actual weapons, in the ongoing debate over gun rights, when the Times opined in 2018 that if the federal government was unwilling to step in and control gun sales, the finance industry could, in essence, take its place, and “regulate” on its own, by withholding banking and payment processing services from ideologically “unsuitable” parties.
Other similar attempts at bypassing the authorities and using the financial system to achieve political goals have been made by the likes of Democrat Alexandria Ocasio-Cortez around the Dakota Access Pipeline controversy, while last year, in response to activist pressure, JP Morgan said it was pulling funding for private detention centers working with Immigration and Customs Enforcement (ICE).