Trump EO on Debanking
President Trump issued an Executive Order (EO) last week directing federal regulators to take actions to combat “politicized or unlawful debanking.” The EO, “Guaranteeing Fair Banking for All Americans,” states that financial institutions engage in practices that restrict individuals’ and business’ access to financial services due to their political or religious beliefs or activities, and that those with conservative views have been unfairly targeted by financial institutions.
The EO directs banking regulators to identify financial institutions that currently or in the past engaged in debanking and take “remedial action” against them. It also requires federal banking regulators to remove the use of reputational risk from their guidance documents, manuals, and other materials, and emphasizes that evaluation of banking services should be based on material, measurable, and justifiable risks.
This Executive Order has received support in Congress where the Chairman of the House Financial Services Committee, French Hill (R-AR), released a statement, “I commend President Trump for taking decisive action to protect all Americans from politically motivated financial discrimination.”
Representative Andy Barr (R-KY) said he will introduce legislation to make the EO permanent.
The EO specifically mentions “Operation Chokepoint” as an example of unfair debanking practices that hinder individuals and businesses based on reputational risk rather than objective standards. “Operation Chokepoint” was an initiative under the Obama administration that investigated bank conduct with such businesses as firearms dealers and payday lenders but ended up entangling other businesses, including installment lenders, who found their often-longstanding banking relationships abruptly ended.
While “Operation Chokepoint” formally ended in 2017, AFSA has continued to support efforts to promote fair banking practices. Recently, AFSA expressed its support for legislation to end “Operation Chokepoint” by prohibiting a federal regulator from ordering a bank to terminate a banking relationship with a legal business unless there is a valid reason not based solely on reputational risk. AFSA will continue to monitor ongoing debanking legislation and administrative actions.
August 14th, 2025
Recent Posts
- AFSA to Congress: Close Debt Settlement Loopholes
- AFSA Webinar | Trust, but Verify: Why Title & Lien Validation is the Missing Link in Lender Fraud Prevention
- Credit Where Credit Is Due: Celebrating Women in Consumer Finance
- The Financial Fraud Congress Cannot Afford to Miss
- Perspective on Auto Loan Performance