New York (AP) – President Donald Trump signed an executive regulation on Thursday, in which an investigation is prescribed whether banks have discriminated against conservative and certain industries such as weapon manufacturers and cryptocurrency companies, and rely on the huge powers to pursue companies that the Republican President claims to discriminate against him and his allies.
The executive order deals with a problem called “Debanking”. When banks close accounts of individuals or lean on to go into business with certain industries. Trump has accused JPmorgan and Bank of America to have debanized him and his companies in the past, which both banks fought.
Trump ordered the Bundesbank supervisory authorities to ensure that banks do not discriminate on individuals or companies because of their political or religious beliefs. He also ordered the bank supervisory authorities to investigate if banks may discriminate against the cases within 120 days and forward them to the Ministry of Justice.
The move could open banks for potential civil or criminal investigations, fines or other punishments.
When Trump and his party talk about Debanking, they usually refer to banks that close the accounts of a person or a company if they no longer want to do business with them. Banks usually say that they close accounts or refuse loans because the person or business is classified as too risky. The banking industry has long argued that it has a constitutional right to choose who they do with whom they do if they do not violate laws like the law on equal credit opportunity.
The law that was part of several laws that were signed during the civil rights movement prohibits banks from discrimination due to breed, ethnicity, religion, sex and other protected status.
Another kind of Debank is when the government’s regulatory authorities tell the banks that they should not do business with industries or individuals. The Ministry of Justice of the Democratic President Barack Obama asked the banks not to make “high risk” brides, including lenders and manufacturers of firearms.
This type of debank, directed by the government, is also referred to as a reputation risk in which the historical reputation of an industry causes the banks to be more careful with regard to banking transactions and loans. Historical examples include companies that have made business in countries with high risk business, have largely worked on business in cash or have been repeatedly identified by bank supervisory authorities. According to the executive order, the bank supervisory authorities must remove the risk of reputation from their metrics, how to measure the security and sound of the bank.
Banks who have benefited from Trump’s deregulation agenda and prefer simpler rules and regulations have tried to make a hot tone with the administration and show themselves as a willing broker that were involved in a hard political environment.
“In the best interest of the banks, it is in the best interest of taking deposits as many customers as possible.
Conservatives have argued that the risk of reputation has become a roof term that enables banks to discriminate. The banking industry insists that it is not actively aimed at certain industries or individuals. The banking industry itself, which knows that the risk of reputation has become liable, has already mentioned the reputation risk from its guidelines and procedures, especially since Trump has returned to the White House.
“Today’s executive order helps ensure that all consumers and companies are treated fairly, a goal that the nation’s banks share with the administration,” said the banks.
For Trump, the question of the Debank is deeply personal. In a far-reaching interview with CNBC at the beginning of this week, Trump claimed that two immense Banken Jpmorgan and Bank of America-Ihn had lowered after leaving the office in 2021.
“They totally discriminate against … I might be even more, but they discriminated against many conservatives,” he said to CNBC.
Both banks have denied that they have exposed Trump.
“For political reasons, we do not conclude any accounts and agree with President Trump that the regulatory change is urgently needed,” said a spokeswoman for JPmorgan Chase in a statement.
Former bank supervisory authorities have argued that the risk of reputation, if they are used together with other metrics, can be a good measure of how well a bank works. Banks that ultimately do business with companies that violate laws in the past or violate money laundering rules can be at risk. The Signature Bank failed in 2023, partly due to its exposure to cryptocurrency companies, during a great downturn in crypto assets. Credit Suisse in 2009 paid the supervisory authorities a billion dollars for the laundry of money on behalf of Iran.
“Financial risk and risk of reputation can be intertwined,” said Graham Steele, a former Ministry of Finance, who also worked as a democratic congress employee in bank questions.
The government of the Obama government, which was organized by the government by the government by the government, was a scream of meeting for conservatives. This is one reason why the Trump cryptocurrency industry supported in 2024. While the bidges administration does not expressly forced banks to Debank, the bank supervisory authorities expressed some public concern by democratic President Joe Biden, a step that was read by banks as the reason to head from crypto. This formulation of the bidges management was often referred to by Trump and his allies as “Operation Choke Point 2.0”.
The Republicans have introduced laws to also reduce alleged deeds of the Debank. Senator Tim Scott from South Carolina, chairman of the Senate Banking Committee, has introduced laws according to which bank supervisory authorities no longer consider the risk of reputation as a factor for measuring the health and risk profile of a bank.
“The commanding of federal business and law -like citizens is un -American, and President Trump’s executive order is a critical step to protect Americans Access to financial services,” said Scott in an explanation.
