On Thursday, President Trump signed an executive order called “Guaranteeing Fair Banking For All Americans,” in which he urged federal regulators to ditch the regulations that allows “politicized or unlawful” debanking. He gave the orders six months after he condemned Bank of America of debanking conservatives.
Even though the Trump EO mainly targets traditional banks, the gaming community is excited about its broad language because payment processors like Mastercard and Visa have long been accused of content censorship by pressuring platforms to remove or restrict games that are controversial or adult-oriented.
Additionally, Trump asked regulators to wipe away reputational risk “and other equivalent concepts” from their websites as well as to investigate the financial institutions that come under their supervision as a means to detect any activities which results in improper debanking. Then, he wrote, such regulators have to “take appropriate remedial action,” which can include imposing fines and issuing consent decrees.
Additionally, the ruling requires regulators to go through complaint and supervisory data for instances of religiously motivated debanking and forward those cases to Attorney General Pam Bondi.
Since January, debanking has been an increasingly common rallying cry for the administration of Trump. Because of the supposedly systematic plan of administration of Biden to debank cryptocurrency businesses according to Operation Choke Point 2.0, the very word is frequently linked with cryptocurrencies.
Despite without specifically addressing payment processors, experts have interpreted the phrase “other financial services providers” and references to payment processing as referring to companies such as Visa and Mastercard.
Political conservatism is also frequently linked to debanking allegations. After the Capitol incidents on January 6, 2021, the Trump family initiated a lawsuit against Capital One in March, for apparently debanking their firms.
In the executive order, President Trump stated that particular financial institutions had “government-directed surveillance programs” that attacked conservatives following the rebellion.
The executive order claimed that these sorts of actions are:
“Incompatible with a free society and the principle that the provision of banking services should be based on material, measurable, and justifiable risks.”
Bank trade associations showed their full support to the executive order. They stated that in spite of allegations towards particular banks, it “helps ensure all consumers and businesses are treated fairly, a goal the nation’s banks share with the Administration,”. On Thursday, Trump told CNBC that JPMorgan along with Bank of America turned down his cash deposits during his first term.
In a joint letter, the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, as well as Financial Services Forum stated that:
“It’s in banks’ best interest to take deposits, lend to and support as many customers as possible,”
The groups wrote:
“Unfortunately, as the EO makes clear, regulatory overreach, supervisory discretion, and a maze of obscure rules have stood in the way.
We look forward to working with the White House, Congress, and the agencies to create a national standard that advances these goals, and we thank the Administration for its efforts to protect banking access and rein in runaway regulations.”
Both the Office of the Comptroller of the Currency as well as the Federal Deposit Insurance Corp. started working on eliminating the same risk from their regulations in March. The Federal Reserve also did the same thing in June.
On Thursday, Comptroller Jonathan Gould made an announcement that the OCC is launching an investigation to figure out if and how the banks it oversees had engaged in illegal debanking, and that it would shortly propose a rule eliminating the same references from its regulations.
Jonathan wrote:
“The OCC is exploring additional steps to ensure politicized or unlawful debanking is never repeated”.
In an emailed comment, however, former Treasury Department assistant secretary for financial institutions Graham Steele claimed that Thursday’s executive order “does exactly what it accuses others of doing: politicizing financial regulation.”
Steele, who was selected by President Joe Biden gave a statement in which he said that:
“It is not about ensuring equal access to the banking system for all. The Trump administration clearly wants to ensure certain industries — such as fossil fuels, gun manufacturers and the crypto industry — have financial access and protection while others — including communities affected by climate change and traditionally marginalized racial and gender groups — do not.”
