US President Donald Trump has ordered regulators to investigate alleged refusal among US banks to supply accounts to customers on the basis of their political or religious beliefs. The executive order, signed Thursday, accuses federal banking regulators of presiding over an unlawful discrimination campaign under the guise of risk management.
The order requires banking regulators to conduct an investigation into instances of politically motivated discrimination and impose disciplinary measures if found guilty. If banks are deemed to have discriminated, they may face fines, consent decrees, and other unspecified penalties.
This move is part of a series of steps taken by Republicans since Trump returned to office to end alleged discrimination by banks. The executive order follows congressional subcommittees’ hearings on the topic of debanking in February and a bill sponsored by Republican senators aimed at prohibiting banks from factoring in “reputation risk” when making decisions about customers.
The crypto industry has welcomed this development, citing years of complaints about US banks refusing to provide them with loans and checking accounts. Industry figures have alleged that the Federal Reserve, FDIC, and OCC pressured banks into refusing service under the Biden administration.
Critics argue that restricting bank discretion over whom they serve may not be practical or effective in preventing debanking. They propose reforms such as paring back the doctrine of “confidential supervisory information” to allow banks to assess risk and decide who they want to do business with.
The crypto industry is cautious, however, and emphasizes the need for codified laws to ensure long-term security in the US market. While an executive order may provide temporary relief, it does not guarantee protection against future administrations reversing this policy.
Source: https://www.wired.com/story/donald-trump-orders-crackdown-on-politically-motivated-debanking