U.S. President Donald Trump is preparing to sign a new executive order that may impose federal penalties on banks that cut ties with cryptocurrency companies or conservative clients for political reasons, according to a report published by The Wall Street Journal on Monday.
According to a draft of the executive order prepared by the White House, regulators will be tasked with conducting investigations to determine whether financial institutions have violated laws such as equal credit opportunity, antitrust laws, and financial consumer protection.
Banks found in violation may face measures including fines, regulatory agreements, or other disciplinary actions.
This action is part of a broader campaign by the Trump administration to combat what is known as 'banking discrimination,' which is the practice of financial institutions stopping or reducing their services to certain entities, including digital asset companies, for political or ideological reasons.
Trump had signed an executive order last January aimed at removing regulatory obstacles that hinder blockchain companies' access to the financial system, in an attempt to ensure fair treatment of these entities within the banking system.
The rising criticism directed at regulators, accused of coordinating to pressure banks to sever ties with the cryptocurrency sector, in what is known as the 'Choke Point 2.0' operation, has led to a rollback of some previous policies, where informal guidance that restricted these transactions has been withdrawn, affirming that banks can work with digital currency companies under appropriate risk management frameworks.
In this context, some banking institutions have begun to take proactive steps, including reviewing their policies and meeting with Republican attorneys general to affirm their commitment to not discriminate based on political affiliation.
The draft executive order stipulates that regulators must review policies that may have led to the restriction or termination of banking relationships, and it directs the Small Business Administration to scrutinize banks' practices regarding loan guarantees.
In some cases, regulators are required to refer potential violations to the Department of Justice.
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