The proposed White House executive order targeting banks that discriminate against crypto and conservative companies is causing a stir in the financial industry. The order aims to penalize financial institutions that cut off clients for political reasons, potentially leading to fines or disciplinary measures for violators.
According to a report from The Wall Street Journal, the draft order spearheaded by the White House would involve bank regulators investigating whether banks have violated laws such as the Equal Credit Opportunity Act, antitrust laws, or consumer financial protection laws. Monetary penalties, consent decrees, or other disciplinary actions could be imposed on banks found to be in violation.
While President Donald Trump is expected to sign the executive order this week, the timing is subject to change. The order is part of the administration’s efforts to address the practice of debanking, where banks restrict or sever relationships with crypto businesses and clients based on alleged political bias.
Debanking concerns have prompted executive actions to ensure fair access to financial services for crypto firms. In January, Trump signed an order aimed at removing regulatory obstacles and expanding banking access for blockchain businesses.
Regulators previously accused of pressuring banks to cut ties with digital asset firms, known as “Operation Chokepoint 2.0,” have started to roll back restrictive policies in response to these concerns. Informal guidance discouraging crypto banking has been rescinded, oversight has been relaxed, and banks have affirmed their ability to serve crypto firms with proper risk controls.
In an attempt to preempt federal action, banks have been meeting with Republican attorneys general and updating their policies to explicitly state that they do not discriminate based on political affiliation. The draft order instructs regulators to eliminate policies that may have led to customer dismissals, directs the Small Business Administration to review the practices of banks guaranteeing agency loans, and requires regulators to refer potential violations to the attorney general in certain cases.
As the financial industry awaits the signing of the executive order, the implications for banks that discriminate against crypto and conservative companies could be significant. Stay tuned for updates on this developing story.