President Donald Trump’s campaign against U.S. debanking of controversial industries, such as digital assets, has led to a new report from the Office of the Comptroller of the Currency that once again confirms past practice and warns of potential sanctions for banks allegedly involved.
The OCC is asking banks to heed President Donald Trump’s executive order issued in August, which calls for an end to debanking and to punish those who have unfairly separated legal customers from the banking system. Trump’s order required regulators to investigate and prosecute companies under their supervision that are guilty of unbanking, “including by imposing fines, issuing consent decrees, or imposing other disciplinary actions against any financial institution subject to the jurisdiction of such Federal banking regulator.”
In the OCC’s brief report examining nine of the largest U.S. national banks, the OCC concluded that “between 2020 and 2023, banks maintained public and nonpublic policies restricting certain industry sectors’ access to banking services, including requiring extensive reviews and approvals before providing access to financial services.” He said some of the big banks have established more difficult entries for controversial or environmentally sensitive businesses, or for activities contrary to the bank’s values.
Banks – including financial giants JPMorgan Chase & Co., Bank of America and Citrigroup Inc. – are highlighted by links to their own past public policies, particularly on environmental issues.
“The OCC intends to hold these banks accountable for any illegal banking activities, including through referral to the Attorney General,” the report states, although it is unclear what specific laws these activities may have violated. While Trump’s previous executive order cited laws governing unfair competition in commerce, the first of these exempts banks. He also cited a law against unfair consumer practices.
But the report makes no such citations, and an OCC spokesperson did not respond to a CoinDesk request for information on how violations of the law might be referred for prosecution.
At the very end of Trump’s previous term, the OCC, under his leadership, had quickly finalized a rule that would have required banks to evaluate any potential customer based on measurable risk factors rather than rejecting entire categories of businesses, such as gun manufacturers, adult entertainment, payday lenders, coal mines, or crypto companies. But it was shelved early in former President Joe Biden’s term, leaving the question open.
Instead, that report referenced the OCC’s bulletins, the agency’s work to eliminate “reputational risk” as a factor in monitoring financial institutions, and Trump’s order. The executive order is not a law itself, but a directive from Trump to his administration’s regulators, not directly to banks.
Although Republican lawmakers and conservative groups have pushed for a backlash against the kind of debanking that crypto companies and their executives have decried, the OCC report didn’t take enough responsibility to please everyone.
“Although the OCC analyzed cases of debanking, it failed to mention some of the most well-known causes of debanking,” Nicholas Anthony, a policy analyst at the Cato Institute, said in a statement. “The report criticizes banks for cutting ties with controversial clients, but it fails to mention that regulators explicitly evaluate banks on their reputation.”
Last week, Republicans in the House of Representatives released a report implicating U.S. banking regulators in the debanking saga of recent years.
Read more: Top US banking regulator Gould says crypto debanking ‘is real’
