Quick Hit:

President Trump on Thursday signed an executive order targeting “politicized” banking practices, barring financial institutions from denying services over customers’ political beliefs or lawful activities. Calling such discrimination “incompatible with a free society,” Trump said the order ensures banking decisions are based on objective risk assessments, not ideology.

Key Details:

• Trump’s order declares it U.S. policy that no American be denied financial services over constitutionally or legally protected beliefs, affiliations, or political views.
• The move follows Trump’s allegation this week that JPMorgan Chase and Bank of America rejected over $1 billion in deposits from him for political reasons. Former Kansas Gov. Sam Brownback has also accused JPMorgan of closing his account over conservative religious beliefs.
• The order directs regulators to strip “reputational risk” from federal guidance, compel reinstatement of customers unlawfully debanked, and authorize penalties for discriminatory practices. Treasury Secretary Scott Bessent will lead a strategy to combat debanking through legislation or regulation.

Diving Deeper:

President Donald Trump signed an executive order Thursday that sharply limits the ability of banks to deny services to individuals or businesses over political beliefs, affiliations, or lawful activities. The directive comes amid mounting allegations that major financial institutions have “debanked” conservatives, cryptocurrency operators, and Second Amendment advocates.

“It is the policy of the United States that no American should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations, or political views,” Trump wrote in the order. “Banking decisions must instead be made on the basis of individualized, objective, and risk-based analyses.”

Earlier this week, Trump accused JPMorgan Chase and Bank of America of rejecting more than $1 billion in deposits for political reasons. “The banks discriminated against me very badly,” he told CNBC on Tuesday. Former Republican Kansas Gov. Sam Brownback has made similar claims, alleging JPMorgan closed his account over his conservative religious views.

Beyond high-profile cases, banks have also faced scrutiny for canceling accounts tied to cryptocurrency ventures and conservative causes. Trump’s order notes that victims of debanking have faced “frozen payrolls, debt and crushing interest, and other significant harms to their livelihoods, reputations, and financial well-being.” Such practices, the order states, are “unlawful” and “incompatible with a free society.”

The measure instructs federal banking regulators to remove “reputational risk” and related concepts from oversight guidelines and directs the Small Business Administration to require all participating financial institutions to make reasonable efforts to reinstate unlawfully debanked customers. Banks found to have engaged in discriminatory debanking could face fines or other penalties.

Treasury Secretary Scott Bessent will be responsible for developing a broader strategy to combat debanking, whether through legislative proposals or new regulations. Regulators must also review complaints and related data, referring potentially unlawful cases to the Justice Department.

In a joint statement, the Bank Policy Institute, American Bankers Association, Consumer Bankers Association, and Financial Services Forum praised the administration’s effort. “Today’s Executive Order helps ensure all consumers and businesses are treated fairly, a goal the nation’s banks share with the Administration,” they said, adding that “regulatory overreach, supervisory discretion and a maze of obscure rules” have hindered access to services. The groups said they looked forward to working with the White House, Congress, and regulators to create a national standard that protects access to banking.