The Trump administration is reportedly moving to address allegations that major banks are discriminating against certain groups and cryptocurrency firms with an executive order that could impose heavy penalties on financial institutions found to be refusing service based on political or ideological grounds.
A draft of this order, obtained by The Wall Street Journal, instructs regulators to investigate whether any banks are breaching laws like the Equal Credit Opportunity Act, antitrust regulations, or consumer protection rules. If violations are found, penalties could include fines, consent decrees, or other measures.
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While the order is expected to be signed soon, possibly within the week, sources suggest that it could be delayed or modified before being finalized.
Although the draft does not specifically name any institutions, it does appear to reference a situation where Bank of America allegedly shut down the accounts of a Christian organization, that provided aid to Uganda, due to its religious beliefs.
Additionally, the draft order calls attention to banks’ involvement in the investigation of January 6, 2021, suggesting that some financial institutions may have played a role in unfairly targeting certain individuals or groups.
For years, conservatives have accused banks of limiting their access to financial services on political or religious grounds, and cryptocurrency companies have similarly argued that they have been systematically excluded from the financial system under the current administration.
Banks, in response, have stated that their decisions are driven by concerns over legal and regulatory risks, particularly those tied to anti-money laundering regulations.
They also maintain that they are simply acting in accordance with financial risks related to emerging sectors like crypto.
Bank of America has expressed support for the administration’s attempt to provide clearer regulatory guidance.
A spokesperson for the bank commented, “We’ve provided detailed proposals and will continue to work with the administration and Congress to improve the regulatory framework.”
In anticipation of potential government action, banks have already begun meeting with Republican attorneys general and updating their policies to ensure they do not discriminate based on political affiliation.
The draft order directs regulators to review and potentially eliminate policies that could be driving banks to shut out certain customers. It also includes provisions for the Small Business Administration to look into the banking practices of institutions that back the agency’s loan guarantees.
During the Trump administration, regulators had taken steps to stop assessing reputational risk when evaluating banks’ decisions about their customers.
The new draft order also suggests that potential violations should be referred to the Department of Justice, which launched a task force earlier this year to investigate instances where banks might have denied customers based on impermissible factors.
