Bank group agrees with Trump ‘diagnosis’ of debanking

President Donald Trump wants banks to stop dropping customers over their political affiliations. One of the top bank lobbyists in Washington shares those concerns.

Greg Baer, president and CEO of the Bank Policy Institute, said he agrees with Trump’s “diagnosis” of the purported rise of “debanking” practices among certain banks, a trend that Baer blames on supervisory overreach. 

“Banks are in the business of attracting and retaining customers, and debanking is bad for business,” Baer said in a written statement issued Thursday afternoon. “We agree with President Trump’s diagnosis that much debanking occurs as a result of an anti-money laundering and ‘reputational risk’ regime administered by the federal banking agencies where certain types of customers are designated as ‘high risk.'”

Baer’s remarks come on the heels of Trump accusing Bank of America CEO Brian Moynihan and JPMorgan Chase CEO Jamie Dimon of denying banking services to individuals with conservative political views. 

“I hope you start opening your bank to conservatives,” Trump said to Moynihan during an event for the World Economic Forum in Davos, Switzerland. “Because conservatives complain that the banks are not allowing them to do business within the bank, and that included a place called Bank of America.”

Trump went on to suggest that the alleged discrimination might have taken place because of policies that “regulators mandated because of [former President Joseph] Biden.” 

“I hope you and Jamie [Dimon] open your banks to conservatives, because what you’re doing is wrong,” he concluded.

Moynihan laughed off the comments and changed the subject. 

Concerns about debanking have been a recurring topic of conversation in some circles — including those in the crypto industry — in recent years, but have largely stayed below the radar of the general public. That has changed since Trump won election last fall, with prominent supporters elevating the issue in prominent forums. This includes Marc Andreessen, co-founder of the venture capital firm Andreessen Horowitz, who raised the topic of debanking on the Joe Rogan Experience podcast last month.

Most account closures stem from concerns about money laundering and compliance with the Bank Secrecy Act, a law from 1970 that requires banks to build and maintain profiles of their customers to flag money laundering concerns. This statute requires banks to file suspicious activity reports, also known as SARs, when potentially illegal actions are detected. 

In a blog post released last month, BPI argued that various policies from bank regulators have resulted in banks having to file SARs in steadily higher volumes over the years. It also argued that some outdated and misguided policies have swept many legitimate business and personal transactions into the anti-money laundering oversight framework.

The industry group has also taken issue with the confidentiality stipulations that come with suspicious activity reporting, noting that they often prohibit banks from informing clients why their accounts were closed.

“Over 5,000 government examiners administer this regime, and pressure banks to defend retention of any ‘high risk’ customer and expend extraordinary resources monitoring those accounts,” Baer said in his statement. “These examiners operate in secret, without checks and balances, and banks that deviate from their directives risk severe fines and penalties. Fix supervision, fix debanking.”

Baer added that BPI intends to work with the Trump administration “to address this problem and enable banks to provide more services to more customers.”