Official White House photo
President Trump’s executive order directs federal bank regulators to investigate account closures tied to political or religious beliefs, phases out the use of “reputational risk” in supervision, and establishes clearer channels for customers to challenge such actions.
The order directs agencies overseeing banks, including the Federal Reserve, FDIC and Office of the Comptroller of the Currency, to investigate whether customers have been denied services for reasons unrelated to financial risk, and to refer suspected unlawful cases, particularly those involving religion, to the Justice Department. Institutions found to have engaged in what the order calls “politicized or unlawful debanking” could face fines, consent decrees or other remedial actions.
In a sweeping provision, regulators are instructed to stop using “reputational risk” as a supervisory benchmark within 180 days. This change could significantly limit the discretion agencies have long used to pressure banks away from certain industries or clients.
Why this matters for you
For most people, losing a checking account, small-business loan or payment-processing relationship is not just an inconvenience. It can derail livelihoods. Without access to mainstream banking, customers may be forced to rely on higher-cost, less secure alternatives such as check-cashing services, payday lenders or unregulated digital payment platforms.
Civil-liberties advocates have warned that account closures based on a customer’s lawful activities, from operating firearm businesses to running controversial nonprofits, can effectively shut those entities out of the economy. Religious institutions and politically active groups have raised similar alarms.
By ordering regulators to review their supervisory and complaint data for evidence of bias, the administration is betting that increased oversight will make banks think twice before terminating relationships without clear, risk-based justifications. It also signals to customers that they have an avenue for recourse if they believe they were dropped for political or religious reasons.
Know Your Rights: Steps to take if you think you have been “debanked” unfairly
- Ask for the reason in writing. Federal law entitles you to certain disclosures when credit or account services are denied. Even for deposit accounts, written documentation strengthens your case.
- Save all communications. Keep emails, letters, and account statements showing the timeline of events and the bank’s stated rationale.
- File a complaint with your regulator:
- National banks: Office of the Comptroller of the Currency (OCC)
- Credit unions: National Credit Union Administration (NCUA)
- State-chartered banks: Your state banking department
- Note religious or political context. If you suspect your faith, political affiliation or lawful business type was the reason for closure, clearly state that in your complaint. The new order specifically targets these situations.
- Escalate if necessary. Under the order, regulators must refer cases of suspected unlawful debanking based on religion to the Justice Department. You can also consult a consumer-protection attorney.
- Stay in compliance. Make sure your business or personal accounts follow anti–money laundering, fraud-prevention and other standard rules so legitimate risk-based closures cannot be used as cover for bias.
Moving forward
Treasury, working with the White House economic team, must develop a governmentwide strategy to address such practices, which could include proposals to Congress. Banks will be reviewing their account-closure policies and examiner guidance to ensure compliance.
For customers, this means there will soon be clearer rules and more defined channels to challenge account closures. While the banking industry maintains that most terminations are tied to fraud prevention, anti–money laundering rules and sanctions compliance, the new order places the burden on regulators to separate legitimate risk-based decisions from those rooted in political or religious bias.
