President Donald Trump’s campaign against US debanking of controversial industries, such as digital assets, has led to a new report from the Office of the Comptroller of the Currency that further confirms past practice and warns of possible punishments for banks allegedly involved.
The OCC is ordering banks to heed President Donald Trump’s executive order issued in August that called for halting debanking and punishing those who have unfairly separated legal customers from the banking system. Trump’s order required regulators to investigate companies under their supervision that are guilty of debanking and pursue them, “including by imposing fines, issuing consent decrees, or imposing other disciplinary measures against any financial institution subject to the jurisdiction of such federal banking regulator.”
In the OCC’s brief report examining nine of the largest U.S. national banks, the OCC concluded that “between 2020 and 2023, banks maintained public and nonpublic policies that restricted certain industry sectors’ access to banking services, including by requiring heightened reviews and approvals before providing access to financial services.” He said some of the big banks set tougher entrances for controversial or environmentally sensitive businesses, or for activities that were contrary to the bank’s own values.
Banks, including financial giants JPMorgan Chase & Co., Bank of America and Citrigroup Inc., are notable for their ties to their own past public policies, especially on environmental issues.
“The OCC intends to hold these banks accountable for any illegal debanking activity, including by referring them to the attorney general,” the report says, although it is unclear what specific laws the activity may have violated. While Trump’s previous executive order cited laws governing unfair competition in commerce, the first of them exempts banks. He also cited a law against unfair consumer practices.
But the report made no such citations, and an OCC spokesperson did not respond to a CoinDesk request for information on how legal violations could be referred for prosecution.
At the end of Trump’s previous term, the OCC under his direction had quickly finalized a rule that would have forced banks to measure any potential customer based on measurable risk factors rather than reject entire categories of businesses, such as firearms manufacturers, adult entertainment, payday lenders, coal mines or cryptocurrency companies. But it was sidelined at the start of former President Joe Biden’s administration, leaving the issue open.
Instead, this report referenced OCC bulletins, the agency’s work to consider “reputation risk” in the oversight of financial institutions, and Trump’s order. The presidential order is not itself a law, but rather a directive from Trump to his administration’s regulators, not to the banks directly.
Although Republican lawmakers and conservative groups have pushed for a backlash against the kind of debanking that crypto companies and their executives have denounced, the OCC report did not take on enough responsibility to please everyone.
“While the OCC broke down cases of debanking, it did not mention some of the most well-known causes of debanking,” Cato Institute policy analyst Nicholas Anthony said in a statement. “The report criticizes banks for breaking ties with controversial clients, but does not mention that regulators explicitly evaluate banks based on their reputation.”
Last week, House Republicans released a report implicating U.S. banking regulators in the debanking saga of recent years.
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