The White House is preparing to take action against banks accused of politically motivated discrimination against cryptocurrency companies and conservative organizations. A new executive order, expected to be released soon, could shake up the U.S. banking system.
Banks Face Severe Penalties
According to the draft reviewed by the Wall Street Journal, financial institutions could face serious consequences if they deny services to clients based solely on their political beliefs or ties to the crypto industry.
Regulators would be tasked with investigating potential violations of:
š¹ The Equal Credit Opportunity Act
š¹ Consumer protection laws
š¹ Antitrust regulations
Banks found in violation could face fines, lawsuits, or be required to enter legally binding reform agreements.
Trump Administration Aims to Protect Banking Access
This move is seen as a clear signal from the Trump-aligned administration to ensure fair access to banking services, especially for groups it believes have been unfairly excluded ā namely conservatives and crypto companies.
Crypto Firms and Conservative Groups: āBanks Are Cutting Us Offā
Many conservative organizations and crypto-related businesses claim that banks have closed their accounts or denied them services without justification, often based on political disagreement or regulatory pressure, even when no laws were broken.
One notable case involved Bank of America, which allegedly closed the account of a Christian group operating in Uganda. The group accused the bank of religious discrimination. However, the bank stated that it simply does not service small businesses operating outside the U.S.
Banksā Role in Capitol Riot Investigation Also Under Fire
The draft also criticizes banks for voluntarily sharing customer data with law enforcement during investigations related to the January 6 Capitol riot. Some banks flagged transactions they believed might be linked to the event, sparking concerns about overreach.
Supporters of the executive order argue this sets a dangerous precedent, where banks act as political enforcers.
Cryptoās āShadow Banā Under Biden Administration
During President Bidenās term, multiple crypto companies reported being unofficially shut out of traditional banking through what regulators dubbed a āshadow banā ā an unspoken policy of denying services without official mandates.
Banks Respond: āWeāre Managing Riskā
Financial institutions argue that their actions are not political but are based on real regulatory risksāparticularly related to money laundering and crypto fraud. They cite strict anti-money laundering laws and lack of clear guidance in handling digital assets.
What Else Is in the Draft?
The proposed order would:
š¹ Prohibit the use of āreputational riskā as a reason to deny clients
š¹ Direct the Small Business Administration (SBA) to review how banks treat loan applicants
š¹ Impact thousands of small businesses dependent on federal loan guarantees
Some banks have already begun updating internal policies, meeting with Republican attorneys general, and publicly committing to fair treatment.
A Bank of America spokesperson said:
āWe welcome the administrationās efforts to provide more clarity. Weāve submitted proposals and will continue to work with regulators and Congress to improve the framework.ā
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