Congress must end political debanking
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.
TL;DR
- A report from a top regulator found that large banks have restricted financial services to customers for political reasons.
- The Office of the Comptroller of the Currency (OCC) investigated nine major banks and found instances of discrimination against customers based on their political beliefs.
- Examples include JPMorgan Chase closing accounts of Trump merchandise sellers and PNC denying credit to a conservative media company.
- The shift to including 'reputation risk' in regulatory frameworks since 1995 has allowed banks to discriminate against customers based on potential adverse public opinion.
- The OCC and FDIC have issued new regulations to eliminate reputation risk as a supervisory category, but these protections could be reversed by a future administration.
- Congress is called upon to permanently prohibit federal banking regulators from using reputation risk as a supervisory category to prevent political discrimination.
- Denying access to financial services for holding constitutionally protected views is considered dangerous and a threat to democracy.