Capital One petitions judge to dismiss Trump's unfreezing bank account litigation
In a controversial move that has sparked debate, the Trump Organization has filed a lawsuit against Capital One, alleging that the bank closed their accounts after January 2021 due to political reasons rather than legitimate financial concerns. The lawsuit, which was filed "almost four years to the date" after initial communication with Capital One about the account closures, contends that this action is part of a broader pattern of "de-banking" conservative clients.
Capital One, along with other major banks like JPMorgan Chase and Bank of America, has publicly denied closing accounts for political reasons and has called for regulatory clarity regarding account closure rules. JPMorgan, in particular, has expressed a willingness to collaborate with the Trump administration to prevent politicized banking decisions.
However, Capital One has not provided detailed financial or compliance reasons for closing the Trump Organization's accounts. The bank wants a federal judge to dismiss the de-banking lawsuit, contending that the Trump Organization lacks facts to back up its assertion.
The Trump Organization, in response, has argued that they were de-banked because of President Trump's political views, but Capital One has not provided a reason for terminating the accounts. The organization's lawsuit asserts claims under consumer protection or consumer fraud laws of four different states, but fails to connect these laws to any party or the account closures.
This ongoing dispute reflects a complex issue where the Trump Organization accuses Capital One of politically motivated de-banking, and Capital One denies such political motives without providing detailed reasons for the account closures.
Meanwhile, lawmakers have taken up the issue by pushing related legislation. The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. have announced that they'll stop considering reputational risk in bank supervision, a move that could potentially impact future de-banking cases.
As the legal proceedings unfold, it remains to be seen whether Capital One will provide more detailed reasons for closing the Trump Organization's accounts, and whether the court will rule in favour of the Trump Organization or Capital One.
Aspects of the Dispute
- Capital One's specific reasons: No detailed public financial/compliance explanation given; closure alleged post-January.
- Trump Organization's claim in lawsuit: Allegation that account closures were politically motivated, part of "de-banking" conservatives.
- Bank response: Denial of politically motivated closures; calls for regulatory clarity and cooperation.
[1] Source: Various news reports and court documents.
- The Trump Organization's legal claim suggests that the closure of their business accounts by Capital One is part of a pattern of financial exclusion, referred to as "de-banking," targeting conservative clients.
- Despite Capital One's denial of politically motivated account closures, they have not publicly provided specific reasons for terminating the Trump Organization's accounts, leaving room for suspicions about the true nature of the decision.
