Each of the nation’s largest banks restricted financial services to lawful customers for political reasons, according to a new report from a top regulator. The Trump administration has moved to stop federal regulators from encouraging such discrimination, and Congress should make these protections permanent.
At the direction of President Donald Trump’s Guaranteeing Fair Banking for All Americans executive order, the Office of the Comptroller of the Currency launched an investigation last year of the nation’s nine largest banks to see if certain policies encouraged banks to deny or limit people’s access to financial services because of their political beliefs.
The OCC found discrimination everywhere. JPMorgan Chase’s payment-processing subsidiary closed accounts belonging to Trump merchandise sellers and a nonprofit company that staff described as “right wing” and “religious.” PNC denied credit to a growing media company with conservative owners who held opinions contrary to the bank’s “beliefs/values.” Wells Fargo squeezed a payment processor to close a religious nonprofit group’s account because it opposed same-sex marriage, despite the processor’s finding that the group had violated no rules. In each case, banks turned access to financial services into a test of political correctness.
Federal law should deter such discriminatory behavior, but instead encourages it.
The OCC has regulated banks since it was created by the National Currency Act of 1863. Its straightforward job is to make sure banks make responsible loans, keep enough money available to meet withdrawals, and protect depositors’ savings. Congress gave regulators the power to inspect banks and intervene when they put customers’ money at risk.
In 1979, regulators adopted common standards to judge banks’ financial strength, management, and ability to pay their bills. The goal was to spot financial trouble before it became a crisis. But in 1995, the OCC adopted a broader framework that included “reputation risk.” Alongside concrete financial risks, regulators would now consider whether a bank’s business might attract adverse public opinion.
“Reputation risk” opened the door for banks to discriminate against conservatives. Rather than assessing whether customers could repay loans or comply with the law, banks weighed whether their views might offend activists, employees, or regulators. One payment processor added screening terms following the Jan. 6, 2021, riot, including “MAGA” and “America First,” and closed a Trump merchandise seller’s account in February 2021. In another account closure involving criticism of Joe Biden and Anthony Fauci, a bank employee acknowledged that there were “no set criteria” for determining what constitutes “hate or racism or terrorism.”
Other banks relied on the Southern Poverty Law Center’s “hate group” designations to flag conservative organizations, even though the SPLC is a notoriously dishonest and extreme left-wing organization. By 2024, employees reviewing firearms businesses explicitly warned that the Biden administration could press banks to stop lending to the industry. A standard intended to protect financial soundness had become a weapon to enforce political conformity.
EDITORIAL: FROM OBAMA TO EL SAYED
To prevent discrimination against conservatives, the OCC and the Federal Deposit Insurance Corporation issued new regulations that eliminated reputation risk as a category for regulatory supervision. This is a good first step, but more must be done. A future administration could reverse these protections and restore the same subjective standard. Congress should prohibit federal banking regulators from using reputation risk as a supervisory category.
No one should be denied access to financial services for holding views protected by the First Amendment. The events of Jan. 6 were traumatic for many people, and those who committed violence on that day should be, and have been, arrested, tried, and convicted. But the Biden administration and corporations went far beyond that, using state regulatory power to persecute those with any connection, no matter how slim, to the events of that day. Debanking citizens whose preferred political party is out of power is dangerous and threatens democracy. Congress should ensure it never happens again.