President Trump Issues Executive Order on “Politicized or Unlawful Debanking”

Earlier today, President Trump signed an Executive Order titled “Guaranteeing Fair Banking for All Americans.” The Order states that “[i]t is the policy of the United States that no American should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations, or political views” and that “[b]anking decisions must instead be made on the basis of individualized, objective, and risk-based analyses.”

The Order specifies several directives to address “politicized or unlawful debanking,” which generally refers to restricting access to financial services on the basis of a customer’s “political or religious beliefs” or “lawful business activities that the financial service provider disagrees with or disfavors for political reasons”:

• The Order directs the Treasury Secretary to develop a comprehensive strategy to combat politicized or unlawful debanking activities of financial regulators and financial institutions, including consideration of legislative or regulatory options.
• The Order also directs each “federal banking regulator”—broadly defined to mean the Small Business Administration (“SBA”) and the federal member agencies of the Financial Stability Oversight Council (“FSOC”) with “supervisory and regulatory authority over banks, savings associations, or credit unions”—to, among other measures, remove the use of reputation risk from guidance documents and examination materials, and identify and “take appropriate remedial action” against financial institutions that have “engaged in politicized or unlawful debanking that violates applicable law.”
• In addition, the Order directs the SBA to require financial institutions with SBA guaranteed loans (“SBA Lenders”) to make reasonable efforts to identify clients and to identify potential clients who were denied services through a politicized or unlawful debanking action in violation of requirements applicable to SBA Lenders, and to take remedial actions.

Background

The Order continues the Trump Administration’s longstanding focus on ensuring what is deemed “fair access” to financial services. At the end of the first Trump Administration, the Office of the Comptroller of the Currency (“OCC”) issued a “fair access to financial services” rule (the “OCC Fair Access Rule”).[1] However, following the change in administration, the OCC paused Federal Register publication of the OCC Fair Access Rule, and the rule never went into effect.[2]

Since the November 2024 presidential election, concerns regarding “debanking,” and what has been referred to as “Operation Chokepoint”—where banks are directed or encouraged by their regulators to minimize their involvement with certain industries, have increasingly becoming the subject of news and social media. President Trump has publicly raised “debanking” concerns, referring to complaints about banks denying services based on political views and citing his own experiences.[3]

In January 2025, shortly after taking office, President Trump signed an Executive Order titled “Strengthening American Leadership in Digital Financial Technology” (“Digital Assets Order”). Among other policy objectives and mandates, the Digital Assets Order refers to “protecting and promoting fair and open access to banking services for all law-abiding individual citizens and private-sector entities alike” as “support[ing] the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy.”[4] The Digital Assets Order, however, does not include any directive specifically addressing fair access to financial services.[5]   

In February 2025, Senator Kevin Cramer (R-ND) and Representative Andy Barr (R-KY) reintroduced the “Fair Access to Banking Act” in the Senate and the House, respectively.[6] These pending companion bills would impose on certain larger banking institutions (i.e., those with assets exceeding $10 billion under the Senate version of the bill and $50 billion under the House version) fair access requirements similar to those in the OCC Fair Access Rule and prohibit those institutions from accessing certain Federal Reserve services and advances if they fail to comply with the requirements.

In March and April 2025, to “curtail the political weaponization of Federal banking agencies,” Senate Banking Committee Chairman Tim Scott (R-SC) and Representative Andy Barr (R-KY) introduced companion “Financial Integrity and Regulation Management Act” (“FIRM Act”) legislation.[7] The FIRM Act would direct the Board of Governors of the Federal Reserve System (“FRB”), Federal Deposit Insurance Corporation (“FDIC”), OCC, National Credit Union Administration (“NCUA”), and Consumer Financial Protection Bureau (“CFPB”) to eliminate reputational risk as a component of the supervision of depository institutions. While these bills remain pending, in recent months, each of the FRB, FDIC and OCC announced that reputation risk will no longer be a component of its examination programs and that it is removing references to reputation risk from its supervision materials.[8]

In April 2025, the U.S. Attorney of the Eastern District of Virginia announced the formation of the Eastern District of Virginia Equal Access to Banking Task Force to investigate allegations of debanking.[9]

At the state level, there have been ongoing Republican-led efforts to enact fair access laws like the OCC Fair Access Rule in recent years. Three states—Florida, Tennessee, and Idaho—have enacted fair access laws, and over a dozen other states have proposed fair access legislation.[10]  Several state Attorneys General have also sent letters to multiple financial institutions addressing allegations of debanking.

Executive Order

Definitions

The Order defines “politicized or unlawful debanking” to mean “an act by a bank, savings association, credit union, or other financial services provider to directly or indirectly adversely restrict access to, or adversely modify the conditions of, accounts, loans, or other banking products or financial services” to any customer (or potential customer) on the basis of their (1) “political or religious beliefs” or (2) “lawful business activities that the financial service provider disagrees with or disfavors for political reasons.” 

The Order defines “federal banking regulator” to include the SBA and the “federal member agencies of the [FSOC] with supervisory and regulatory authority over banks, savings associations, or credit unions.” The federal member agencies of the FSOC are the FRB, FDIC, OCC, NCUA, CFPB, Securities and Exchange Commission (“SEC”), Commodity Futures Trading Commission (“CFTC”), and the Federal Housing Finance Agency (“FHFA”). 

Purpose & Policy

The Order states that “[b]ank regulators have used supervisory scrutiny and other influence over regulated banks to direct or otherwise encourage politicized or unlawful debanking activities” and cites examples of financial institutions engaging in “unacceptable practices to restrict law-abiding individuals’ and businesses’ access to financial services on the basis of political or religious beliefs or lawful business activities.”

To respond to “the systemic abuses by financial institutions that undermine free expression and economic opportunity,”[11] the Order states that it is the “policy of the United States that no American should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations, or political views, and to ensure that politicized or unlawful debanking is not used as a tool to inhibit such beliefs, affiliations, or political views” and that “[b]anking decisions must instead be made on the basis of individualized, objective, and risk-based analyses.” 

Treasury Secretary

Within 180 days, the Treasury Secretary, in consultation with the Assistant to the President for Economic Policy, must develop a comprehensive strategy, including legislative and regulatory recommendations, for additional measures to “combat politicized or unlawful debanking activities of financial regulators and financial institutions across the Federal government.” 

Federal Banking Regulators

Removal of Use of Reputation Risk. Within 180 days, each federal banking regulator must: (1) “to the greatest extent permitted by law,” remove the use of reputation risk or equivalent concepts that could result in politicized or unlawful banking from their guidance documents, manuals, and other supervisory materials; and (2) issue formal guidance to examiners about the elimination of such concepts. Furthermore, the federal banking regulators are directed to consider revising or rescinding regulations that could result in “politicized or unlawful debanking” and to ensure that a customer’s reputation is “considered for regulatory, supervisory, banking, or enforcement purposes solely to the extent necessary to reach a reasonable and apolitical risk-based assessment.”

Potential Enforcement Action for Unlawful Debanking. Within 120 days, each federal banking regulator must identify financial institutions subject to its jurisdiction that have had “any past or current, formal or informal, policies or practices that require, encourage, or otherwise influence” the institution to engage in politicized or unlawful debanking and “take appropriate remedial action, to the extent authorized and consistent with applicable law.”  According to the Order, such remedial measures could include “levying fines, issuing consent decrees, or imposing other disciplinary measures” against a financial institution the federal banking regulator finds has “engaged in politicized or unlawful debanking that violates applicable law,” including the Equal Credit Opportunity Act (“ECOA”) and the provisions prohibiting unfair and deceptive acts or practices of the Federal Trade Commission Act and the Consumer Financial Protection Act.

Department of Justice (DOJ) Referral for Unlawful Debanking on the Basis of Religion. Each federal banking regulator is also directed to, within 180 days, review its current supervisory and complaint data and identify financial institutions that have “engaged in unlawful debanking on the basis of religion.”  If an identified financial institution is unable to “obtain compliance” within the meaning of the ECOA, the relevant federal banking regulator must refer such matters to the Attorney General for “appropriate civil action, as appropriate.” 

Small Business Administration

Within 60 days, the SBA must provide a notice to all SBA Lenders requiring them, within 120 days, to make reasonable efforts to identify and reinstate any previous clients of the institution or its subsidiaries who were denied service through a politicized or unlawful debanking action “in violation of a statutory or regulatory requirement under Section 7(a) of the Small Business Act or any requirement in a Standard Operating Procedures Manual or Policy Notice related to a program or function of the [SBA’s] Office of Capital Access” (such requirements, the “SBA Requirements”),[12] with notice of the reinstatement sent to the victim.

The notice must also direct SBA Lenders to identify all potential clients denied access to financial services or payment processing services provided by the institution or its subsidiaries through a politicized or unlawful debanking action in violation of the SBA Requirements, and to provide notice to each victim advising of the denied access and the renewed option to engage in those previously denied services. 

Implications

The Order builds on recent actions undertaken by lawmakers, regulatory agencies and enforcement authorities seeking to address debanking concerns. Although the ultimate contours of many provisions of the Order are currently unclear, the Order appears to broaden the scope of financial institutions as well as regulators required to address politicized or unlawful debanking activities. For example, the Order refers to banks, savings associations, credit unions, and financial institutions without applying any minimum size threshold. This is in contrast to the OCC Fair Access Rule and the companion “Fair Access to Banking Act” bills, which would apply only to large financial institutions (i.e., $100 billion or more in total assets under the OCC’s rule, more than $10 billion in total assets in the current Senate version and more than $50 billion in total assets in the current House version of the Fair Access to Banking Act), and Tennessee’s fair access law, which likewise applies to financial institutions with over $100 billion in assets.[13] Similarly, the term “federal banking regulators” is broadly defined to include the SBA and the federal member agencies of the FSOC “with supervisory and regulatory authority over banks, savings associations, or credit unions.” There is, however, some ambiguity as to whether all of the federal member agencies of the FSOC (e.g., the SEC, CFTC, and FHFA) have “supervisory and regulatory authority” over banks, savings associations, or credit unions and, therefore, are subject to the Order’s directives applicable to federal banking regulators. 

The Order’s impact on financial institutions will depend on how the relevant federal banking regulators interpret and apply its provisions. For example, the definition of “politicized or unlawful debanking” refers to “lawful business activities” without specifying whether “lawful” means lawful under federal laws, either federal or state laws, or both federal and state laws. In addition, although the OCC Fair Access Rule, the state fair access laws, and the proposed Fair Access to Banking Act bills have generally focused on banking institutions, the Order refers to “financial institutions” in many provisions without defining the term. It remains to be seen how each federal banking regulator would define “financial institutions subject to its jurisdiction” when conducting its lookback review and under what circumstances each federal banking regulator would find that a financial institution subject to its jurisdiction has engaged in politicized or unlawful debanking based on “violat[ions] of applicable law.” It also remains to be seen whether and how the federal banking regulators would coordinate in their review of, and taking any “remedial action” against, financial institutions subject to the jurisdictions of multiple federal banking regulators. In addition, the Order’s SBA provisions raise several questions regarding the scope of the SBA Lenders’ self-review. For example, the Order does not specify any lookback period for the self-review and, by including a provision that requires identification of potential clients denied access to “payment processing services” through a politicized or unlawful banking action in violation of the SBA Requirements, the Order seems to contemplate that the self-review may not be limited to SBA loans. It is unclear whether the SBA will provide any guidance on the scope of the required self-review by SBA Lenders.

The Order also requires the Treasury Secretary to consider legislative or regulatory options to eliminate politicized or unlawful debanking activities of financial regulators and financial institutions. Legislation and regulatory actions at the federal level may implicate the application of state fair access laws to banking institutions, including on the basis of preemption.

Considering the continued focus on ensuring fair access to financial services at both the federal and state levels, banking institutions should closely monitor developments in this space, including further actions by the Treasury Secretary and the federal banking regulators to interpret and implement the Order. Banking institutions should also consider whether to expressly state in their relevant policies that they do not deny services to or otherwise discriminate against a customer or a prospective customer on the basis of political views or religious beliefs.