For years, big banks have been lying about debanking conservative customers for political reasons. They tried to hide behind “regulatory pressure” when explaining why they closed accounts or denied services, but President Donald Trump’s Aug. 7 executive order put that excuse to rest. With it, the dubious and widely abused “reputational risk” standard has been torn from the banks’ playbook, as it is thankfully no longer recognized by the federal government.
The plain fact is that every time a bank chose to drop a customer over so-called “reputational risk,” they were really talking about preserving their own reputation with powerful left-wing activists at the expense of everyday Americans.
After Obama-era regulators gave banks the green light to treat “negative public opinion” as a serious risk, some of the biggest banks enthusiastically seized on language so vague that it allowed them to freely target conservative-leaning industries and individuals, including gun stores, faith-based groups, and even the Trump family. Red state officials, such as Alabama’s state auditor Andrew Sorrell, had their businesses debanked without explanation, all while their banks and insurers privately admitted off the record, “Oh yeah, this is happening to all gun stores.” (Sadly, that’s an actual quote.)
Contrast that with the gaping double standard applied to the Left. When Bud Light, Harley-Davidson, and Jaguar bent the knee to leftist elites by pushing transgender and diversity, equity, and inclusion marketing, they faced swift and punishing backlash from their core customers. Bud Light’s partnership with a transgender activist led to a historic consumer collapse, costing the brand billions of dollars and tarnishing its reputation among the customers who were the backbone of the company. Harley-Davidson’s CEO pushed left-wing agendas, angered its loyal riders, promoted expensive electric bikes nobody wanted, and saw dealership closures while lifelong customers swore off the brand.
Ironically, despite historic backlash and measurable harm to their businesses, not a single major bank ever threatened to debank Bud Light, Harley-Davidson, or Jaguar for “reputational risk.” Catering to left-wing activists, radical climate agitators, and race-based ideologues led to possible litigation, drops in revenue, and a decline in customers, but it apparently didn’t matter. If “reputational risk” truly meant what banks claim, then those brands would have faced the same treatment as conservative small businesses and outspoken faith groups. The evidence makes it clear that “reputational risk” served as a political weapon, not a neutral standard.
To this day, banks pretend they only engaged in political debanking because of unbearable government pressure. Every time Congress or the media calls them out, they ask for more “regulatory clarity.” But what’s clear is that these banking giants have always had discretion, yet they chose to use it against only one side of the political spectrum.
The fact that Trump was debanked ensures he will not forget who made those choices and who looked for cover. His new executive order responds directly to the banks’ evasions and the loophole they exploited by banning the use of vague and subjective “reputational risk” language. The banks can no longer claim they were just following instructions.
Regulators are now required to provide clear, objective standards. Banks are required to offer equal access regardless of political or religious views. There is simply no more place to hide behind regulators. Banks will be held accountable for who they serve or refuse to serve, with full transparency and real consequences.
TRUMP’S TROUBLESOME TURN TOWARD STATE CAPITALISM
This is not about minor tweaks to bank policy. It is about dismantling a politicized system in which financial giants used the full power of Wall Street and C-suites to silence and punish those who failed to align with left-wing orthodoxy, only to pretend their hands were tied by Washington. Trump’s recent action changes everything. Banks must now prove their decisions are based on actual, quantifiable risk, not on pressure from activist regulators or demands from political insiders.
All Americans deserve equal access to the financial system regardless of their personal beliefs. The banks’ favorite debanking excuse, that they had no choice, no longer holds water. “Reputational risk” was always a smokescreen for blatant viewpoint discrimination at the highest level, with our biggest banks using the financial system as a lever to reshape society and eliminate dissent. Trump is right to fight this abuse of power, and groups like Consumers’ Research proudly stand with him in defense of every American’s financial freedom.
Will Hild is the executive director of Consumers’ Research, the nation’s oldest consumer advocacy organization.