The Trump administration is preparing a firm response to major banks that allegedly refuse clients based on political beliefs. The move follows complaints from President Trump himself, who claims that institutions like JPMorgan and Bank of America declined to manage his accounts.
š Executive Order to Address āPoliticized Banking Practicesā
According to Reuters, a new executive order is under review that would direct financial regulators to investigate whether banks are engaging in politically motivated or unlawful account closures. If violations are found, regulators would have the power to impose fines or other penalties.
Two financial industry insiders confirmed the order could be issued as soon as this week. The White House declined to comment.
š„ Trump: āI Was Targeted Because of My Politicsā
The issue escalated after Trump told CNBC on Tuesday that he was rejected by major banks due to political pressure from the Biden administration. He claimed he had hundreds of millions of dollars in cash accounts that were suddenly closed with a 20-day notice to withdraw his funds.
āThey discriminated against meāand maybe not just me, but many other conservatives,ā Trump said.
He added that he then tried to deposit funds at Bank of America, but was again turned away. Eventually, he claimed he had to split his funds among smaller banks across the country. āI was putting $10 million here, $10 million thereā¦ 5 million, 12 million,ā though he didnāt name those banks.
š¦ Bank Responses: Vague but Cautiously Supportive
JPMorgan did not directly address Trumpās accusation but stated:
āWe do not close accounts for political reasons, and we agree with President Trump that regulatory reform is desperately needed. We commend the White House for addressing this issue and look forward to working together.ā
Bank of America also declined to comment on Trumpās specific claims, but supported regulatory clarification:
āWe welcome the administrationās efforts to clarify policies and have provided detailed proposals. We will continue working with both the administration and Congress to improve the regulatory framework.ā
ā ļø Reputation Risk and Why Banks Consider It
Under Bidenās administration, regulators were allowed to consider āreputational riskā ā the idea that bad publicity from certain clients could harm a bankās brand or lead to lawsuits.
Insiders say this was a major concern when dealing with Trump, given his ongoing legal troubles. JPMorgan, for instance, has long-standing ties to the Trump family and still manages several campaign accounts.
šļø Fed Drops āReputation Riskā Rule
In June ā after Trump returned to office ā the Federal Reserve instructed its supervisors to stop using reputational risk as a factor in bank evaluations. Banks had long lobbied for this change.
Wells Fargo analyst Mike Mayo said the upcoming executive order would make it clear that banks cannot use such standards as a smokescreen:
āBanks can still apply regular underwriting standards and deny servicesābut they canāt blame regulators or hide behind reputation risk.ā
š Markets Respond Calmly, For Now
Despite the drama, market reactions were muted. Bank of America shares held steady on Wednesday, while JPMorgan dipped 0.4%, following a 1% drop the day before.
š Summary: Trumpās Banking Feud May Reshape Financial Oversight
š¹ White House drafts executive order to ban political bias in banking
š¹ Trump says JPMorgan and Bank of America refused to manage his accounts
š¹ Banks stay quiet on specifics but support clearer policies
š¹ Reputational risk no longer allowed as regulatory factor
š¹ Markets stable, but industry watches the situation closely
This incident reignites the debate over how much control banks should have in choosing clientsāand whether a president can use personal experience to shape national financial policy.
#whitehouse , #TRUMP , #Regulation , #JPMorgan , #BankingNews
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