The US Senate Banking Committee held a hearing to examine claims that banks deny services to certain industries or political groups. Senior Republicans and Democrats agreed that banks may be improperly denying services, but disagreed on the root cause.
Banks argue that restrictive rules and oversight are the main obstacle to providing services to industries such as firearms manufacturers and cryptocurrency firms. They claim that these rules discourage banking activity and force them to decide whether they want to do business with certain types of industries.
Democrats focus on industry missteps, which they believe show the need for robust watchdogs. Senator Elizabeth Warren highlighted thousands of complaints collected in a regulatory database from people who could not open accounts or had accounts abruptly closed.
The banking industry has resisted accusations that it denies services based on ideological reasons, arguing that outdated and opaque rules make it difficult to provide services or explain why they cannot. Republican-led states have pushed legislation to discourage perceived discrimination by banks, but the patchwork of varying laws has led to frustration in the industry.
The dispute drew headlines when President Donald Trump accused Bank of America and JPMorgan Chase of not providing banking services to conservatives, echoing complaints of “woke capitalism.” The banks responded by saying they do not refuse services on political grounds. The industry is now pushing for clearer rules, a national standard on fair access to financial services, clarity around anti-money laundering laws, and streamlined bank supervision.
Testimony from witnesses included Aaron Klein, a senior fellow at the Brookings Institution, who said that outdated cash transaction reporting thresholds and rapidly escalated suspicious activity reports are causing issues.
Source: https://www.reuters.com/world/us/us-senate-panel-dives-into-debanking-fight-2025-02-05