Trump signs executive order putting pressure on big banks over ‘politicized debanking’

President Trump signed an executive order on Thursday that ups his administration’s scrutiny over whether big banks denied services to consumers and businesses based on political or religious grounds.

The action calls for federal bank regulators to investigate if the decisions made by financial institutions to deny access to certain customers were “politicized or unlawful debanking.”

Regulators are also called to review their supervisory data for instances of unlawful debanking based on religion and refer such cases to the Attorney General. Institutions found to have encouraged politicized or unlawful debanking will face remedial actions, including fines or consent decrees, according to the order.

The order also calls for bank regulators to strike a particular kind of risk assessment from their guidance and supervision efforts known as reputational risk. Two federal bank regulators — the Federal Reserve and Office of the Comptroller of the Currency — have already eliminated reputational risk as part of their bank examination programs. The FDIC has signaled it plans to follow suit.

The Small Business Administration will also be tasked with requiring institutions to take efforts to reinstate customers previously denied services unlawfully.

The order did not lay out further details for how the investigative efforts by regulators will unfold, including which lenders these agencies will choose to scrutinize first.

The order is another boon to crypto, which during the Biden era, was flagged by regulators as a higher-risk industry for lenders. It also reflects how the president’s own interests continue to shape policymaking this year.

On Tuesday, President Trump claimed that the country’s two largest banks — JPMorgan Chase (JPM) and Bank of America (BAC) discriminated against him and other conservatives by denying them services. He cited his own personal experience as an example.

“The banks discriminated against me very badly,” Trump said in a Tuesday morning interview with CNBC’s “Squawk Box.”

The president is far from the only entity carrying the Trump name that has claimed denial of banking services.

Earlier this year, the Trump Organization sued major credit card lender Capital One (COF) for allegedly debanking hundreds of its accounts following the Jan. 6, 2021, attack on the US Capitol in Washington, D.C.

The bank has since said the lawsuit failed to include any facts to back the claim that the moves were politically motivated.

For years, conservatives have claimed that US banks have denied accounts to certain customers for political reasons. Crypto companies and their executives have also claimed they have lost or were denied banking services; Coinbase Global executives have shared several accounts.