President Trump signed an executive order Thursday aimed at stopping banks from barring customers for what he says are political or religious reasons, an attempt to appease conservatives and cryptocurrency types who have complained about their treatment by Wall Street.
The order deals with “debanking,” a catchall term for claims of having been denied a bank account or loan for reasons unrelated to finances. It instructs various federal regulators and agencies to investigate the matter and “make reasonable efforts” to reinstate debanked customers.
The order also raises the specter of federal prosecutions of banks, by instructing regulators to refer some previous debanking complaints to the attorney general’s office.
Major banks largely insist they are blameless for the closed accounts, saying that regulations begun under President Obama and continuing into Mr. Trump’s first term and the Biden administration required them to take a hard line against potential customers who transact disproportionately in cash or operate gun-related businesses, among other categories.
Mr. Trump’s executive order echoes the banks’ defenses on the issue, saying prior federal directives had forced lenders to deny banking services to certain categories of disfavored customers.
Some of the actions laid out in the order repeat steps that federal regulators have already taken on the issue recently, such as dropping a hotly debated rule that allowed federal overseers to assess whether a bank client could harm a lenders’ reputation. Many banks had cited the rule as a reason for closing customer accounts.
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The post Trump Orders Clampdown on ‘Debanking,’ a Personal Gripe appeared first on New York Times.
