Trump regulatory probe finds US lenders may have 'debanked' people on political grounds

Big U.S. lenders are anticipating increased scrutiny as a significant regulatory review into alleged 'debanking' practices concludes. The Office of the Comptroller of the Currency (OCC) is poised to release findings in the coming weeks, which are expected to name specific banks and could lead to disciplinary actions.

The supervisory review examines whether financial institutions, including major players like JPMorgan and Bank of America, have unfairly denied or terminated services to customers based on religious or political grounds. The investigation also considers whether lenders have refused services to legitimate sectors such as fossil fuel companies, gun manufacturers, and cryptocurrency businesses, often due to perceived reputational risks.

This crackdown stems from pressure initiated by former President Donald Trump, who has characterized such actions as politically motivated debanking, often pushed by Democrats. Republicans have long criticized Wall Street banks for what they describe as "woke" policies, alleging discrimination against conservative-aligned industries and individuals.

The OCC's preliminary report in December flagged that nine large banks had policies restricting services to certain groups or industries between 2020 and 2023. The agency has since conducted multiple rounds of detailed inquiries into banks' decision-making processes. The final review is expected to highlight specific cases and may result in formal sanctions, such as supervisory notices demanding policy changes or public enforcement actions potentially involving penalties.