White House Cracks Down: Banks Face Scrutiny for Politically Motivated Service Denials

The Biden administration takes aim at financial institutions accused of ideological discrimination—because nothing says 'free market' like government-mandated banking.

Banking's New Red Line

Federal watchdogs are gearing up to investigate—and potentially fine—banks that allegedly blacklist customers based on political affiliations. The move comes amid rising tensions over financial inclusion versus institutional risk appetites.

Due Process or Overreach?

While framed as consumer protection, skeptics see regulatory creep. 'Suddenly banks need political commissars,' quipped one hedge fund manager between sips of $28 cold brew. Meanwhile, compliance departments brace for another paperwork tsunami.

The irony? This push for transparency drops as crypto—the ultimate opt-out financial system—hits new adoption highs. Maybe decentralized finance doesn't look so radical after all.

Trump says banks refused his money

The proposed order comes after TRUMP told CNBC on Tuesday that both banks had turned him away. Without presenting any evidence, he claimed the Biden administration asked regulators to “destroy” him. “They did discriminate,” he said of actions by JPMorgan once his first term ended. “I had hundreds of millions, I had many, many accounts loaded up with cash … and they told me, ‘I’m sorry sir, we can’t have you. You have 20 days to get out.’”

He went on to say that the banks “totally discriminate against, I think, me maybe even more, but they discriminate against many conservatives.” Trump said he then tried to place money with Bank of America, but was refused again. “I ended up going to small banks all over the place,” he said. “I was putting $10 million here, $10 million there, did $5 million, $10 million, $12 million,” though he did not name those smaller banks.

JPMorgan issued a statement that did not reply directly to Trump’s account. “We don’t close accounts for political reasons, and we agree with President Trump that regulatory change is desperately needed,” the bank said. “We commend the White House for addressing this issue and look forward to working with them to get this right.” Bank of America also declined to address Trump’s specific allegations.

Under President Joe Biden, regulators had been allowed to consider “reputational risk”, the chance that bad publicity could harm the bank or lead to lawsuits, when deciding whether to take on certain clients.

Sources say banks felt pressure to weigh that risk when handling Trump, given his ongoing legal battles. JPMorgan, for example, has long-standing ties to the Trump family and holds several of its campaign accounts.

In June, after Trump returned to office, the Federal Reserve told its supervisors to stop using reputational risk as a factor in bank reviews, an issue that banks had complained about for years.

Wells Fargo analyst Mike Mayo says the upcoming order WOULD make clear that banks cannot use such rules as a shield. “Banks can use their normal underwriting standards and deny services, but not blame regulators or use reputational risk as a justification,” he said.

Bank of America responded that it “welcomed the administration’s efforts to clarify the policies,” adding that it has “provided detailed proposals and will continue to work with the administration and Congress to improve the regulatory framework.”

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