On August 7, 2025, President Trump signed an executive order, Guaranteeing Fair Banking for All Americans (the EO), in response to alleged cases of major banks declining to provide services to individuals or groups based on political or religious beliefs, or lawful business activity, including the digital asset industry.1
The EO directs that:
- Federal banking regulators will remove reputational risk and similar concepts from guidance, examination manuals, and other materials. The EO also requires federal banking regulators to review financial institutions for past or current policies that encourage "politicized or unlawful debanking" and to take remedial actions, including fines, consent decrees, and referral to the Attorney General in cases where debanking was based on religion;
- The Small Business Administration will require financial institutions under its jurisdiction to make efforts to reinstate clients or potential clients who were previously denied services due to alleged debanking; and
- The Secretary of the Treasury will develop a strategy to combat politicized debanking.
This is the latest in a series of initiatives from the executive branch and Congress aimed at addressing perceived debanking. The federal banking regulatory agencies—the Office of the Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), and Federal Reserve Board (FRB)—have announced that they will no longer consider reputational risk when evaluating risks faced by banks.2 Legislation prohibiting federal banking regulators from supervising or examining reputational risk is pending in the Senate, where it was introduced by Senator Tim Scott, chairman of the Senate Committee on Banking, Housing, and Urban Affairs, and in the House of Representatives.3 State regulators have also weighed in on the issue. Kansas Attorney General Kris Kobach led a coalition of 15 state attorneys general in sending a letter to a large national bank expressing concern about its denial of services to customers based on the industries in which customers were involved, such as firearms manufacturing and distribution or fossil fuel production, as well as political views and religion.
We expect the current administration to continue focusing on this issue, particularly regarding banking services provided to conservative figures and organizations, as well as participants in the digital asset industry, who have also reported discrimination by banks. The EO requires federal banking regulators to conduct a "look-back" at potential debanking practices within the next 120 days. The EO also calls for regulators to evaluate whether prior debanking violated federal laws, including consumer protection laws and the Equal Credit Opportunity Act. It directs regulators to "review their current supervisory and complaint data" within 180 days to identify any instances in which a bank illegally closed an account based on a customer's religion and refer those cases to the Justice Department. Federal enforcement activity is likely to focus on these areas. Banks and other financial institutions subject to federal regulation should review their anti-discrimination policies and procedures and customer due diligence practices in light of the EO. They also should consider analyzing supervisory and complaint information to assess risk under the EO.
Footnotes
1. Guaranteeing Fair Banking for All Americans (Aug. 7, 2025) https://www.whitehouse.gov/presidential-actions/2025/08/guaranteeing-fair-banking-for-all-americans/.
2. Office of the Comptroller of the Currency, News Release 2025-21, OCC Ceases Examinations for Reputational Risk (Mar. 20, 2025), https://www.occ.treas.gov/news-issuances/news-releases/2025/nr-occ-2025-21.html; Letter from Travis Hill, Acting Chairman, Federal Deposit Insurance Corporation to Hon. Dan Meuser, Chairman, Subcommittee on Oversight and Investigations, U.S. House of Representatives Committee on Financial Services (Mar. 24, 2025) https://aboutblaw.com/bhDr; Federal Reserve Board, SR 95-51, Rating the Adequacy of Risk Management Processes and Internal Controls at State Member Banks and Bank Holding Companies (Jun. 23, 2025) https://www.federalreserve.gov/supervisionreg/srletters/SR9551.htm.
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