- Key insight: The judge’s decision is not an outright victory for Capital One, as the Trump Organization has an opportunity to rebuild its claim.
- What’s at stake: President Donald Trump has criticized banks for allegedly offboarding clients for political and religious reasons.
- Forward look: The Trump Organization can conduct discovery for the next 90 days, and has until July 2 to file an updated suit.
In a win for banks fighting allegations of political discrimination, a judge threw out a lawsuit that President Donald Trump’s family business brought against Capital One Financial, though the case can still be refiled.
U.S. District Judge Roy Altman said Friday that he would grant Capital One’s motion to dismiss the lawsuit. The suit alleges that the McLean, Virginia-based company illegally closed hundreds of Trump Organization accounts following the Jan. 6, 2021, attack on the U.S. Capitol.
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But the book isn’t closed on the debanking allegations.
The Trump Organization can now spend the next three months collecting evidence through the discovery process to rebuild its case. The judge said the plaintiff has until July 2 to refile its complaint.
The Trump Organization sued Capital One last spring in Florida, claiming that the bank violated consumer protection laws by offboarding accounts for political reasons. The plaintiffs alleged that Capital One closed their accounts because the bank “believed the political tide favored doing so.”
In its motion to dismiss the complaint, Capital One said the suit had “numerous factual and legal defects.” The bank also said that the Trump Organization’s claims didn’t warrant declaratory relief, and that the facts as presented weren’t illegal.
Capital One declined to comment on the latest court development.
Altman, a Trump appointee, said during Friday’s hearing that the plaintiffs had done “just enough” to allege political debanking, though the evidence lacked specifics,
“I’m going to ask you to beef up these general allegations,” Altman reportedly said to Trump’s lawyer.
The Trump administration has mounted a campaign against political debanking over the last year. In the lawsuit against Capital One, the plaintiffs pointed to what they argued is “a growing trend by financial institutions in the United States of America to cut off a consumer’s access to banking services if their political views contradict with those of the financial institution.”
In October, Comptroller of the Currency Jonathan Gould said the agency he leads
Then in November, JPMorganChase disclosed
In January, Trump sued JPMorgan, alleging similar offboarding practices following Jan. 6, 2021. While JPMorgan has said that it did deliberately close dozens of Trump accounts in 2021, CEO Jamie Dimon told CNBC earlier this month that “the case has no merit.”
“We debank people because it causes legal, regulatory risk for us,” Dimon said. “It’s been much easier for a bank to say, ‘I’m not taking the risk, let them go bank elsewhere.'”
Trump upped his rhetoric against
“The banks discriminated against me very badly,” the president said during a CNBC interview in August, claiming that JPMorgan had dropped him as a customer and Bank of America wouldn’t serve him. “Banks are not afraid of anything but a regulator,” he said later.
Banks have repeatedly pointed fingers at their regulators to explain their decisions to push out clients.
A report by the Cato Institute from January
“The president is after the right thing,” Bank of America CEO Brian Moynihan told CNBC last August. “We’ve got to stop the regulators behind the scenes whipsawing back and forth and forcing our companies, and companies like ours, to make decisions.”