U.S. Administration Contemplates Executive Decree to Prevent Financial Disassociation of Political Entities Among American Banks
White House Unveils Executive Order to Combat Bank Account Closures Based on Political and Ideological Views
The White House has announced an upcoming executive order, titled "Guaranteeing Fair Banking for All Americans," which aims to prevent banks from closing accounts based on political or ideological views. The order, signed by President Donald Trump on August 7, 2025, is set to address the growing concern over financial access and free expression.
Key contents and effects of the order include:
- Prohibition of politicized or unlawful debanking: Federal banking regulators will be required to remove the "reputational risk" standard and similar concepts from their guidance and examination manuals. This change will prevent banks from closing accounts based on political or religious reasons.
- Review and remedial actions: Regulators will review past and current bank policies that may promote debanking and take enforcement actions such as fines, consent decrees, or referrals to the U.S. Attorney General for unlawful cases.
- Requirement for reinstatement efforts: The Small Business Administration will require financial institutions under its jurisdiction to make reasonable efforts to reinstate clients and potential clients who were denied services due to unlawful debanking.
- Comprehensive strategy development: The Treasury Department, together with economic policy advisors, will develop a broader strategy to address debanking, possibly including new legislative or regulatory measures.
The order has significant implications for various sectors:
- Political and religious views: The order explicitly targets unfair discrimination in banking due to political ideology or religious beliefs, ensuring people cannot be denied banking services for these reasons.
- Crypto firms: The order aims to end banking discrimination against crypto companies, supporting their access to traditional banking services. It references investigations under laws like the Equal Credit Opportunity Act and consumer protection laws and signals a new level of federal oversight in crypto banking.
- Nonprofits: The order references cases like Bank of America closing accounts for a Ugandan Christian nonprofit, indicating such closures may now be investigated and penalized if found to be based on unlawful bias.
- Small businesses: The Small Business Administration's directive to have banks reinstate customers previously dropped due to debanking policies directly benefits small businesses relying on fair banking access.
- Crypto market: By promoting fair access and scrutinizing debanking of crypto-related entities, the order is expected to foster wider adoption and institutional investment in crypto, alleviating a significant hurdle for cryptocurrency companies within the traditional financial system.
The draft order does not address the Justice Department's ongoing investigation into banks sharing data with law enforcement following the Jan. 6 Capitol riots. The White House may soon sign the executive order, though the exact timeline remains uncertain. The measure could address past cases involving banks like Bank of America, such as the case of a Christian charity that lost access to banking services in 2023.
The review of small businesses' loan guarantees by the Small Business Administration could impact their operations. The draft order empowers regulators to refer certain violations to the Department of Justice. In April, the Justice Department launched a special task force in Virginia to investigate claims of service denial based on political or ideological reasons. The draft order directs federal regulators to investigate such actions and potential violations of consumer protection laws, antitrust rules, and the Equal Credit Opportunity Act.
The draft order presses regulators to identify and eliminate any internal rules that caused reputational de-risking, including policies that exclude customers over political or ideological concerns. This order marks a significant step towards ensuring fair banking practices and protecting the financial rights of all Americans.
[1] CNBC. (2025). White House to take action against banks closing accounts based on political views. [online] Available at: https://www.cnbc.com/2025/08/07/white-house-to-take-action-against-banks-closing-accounts-based-on-political-views.html
[2] Reuters. (2025). White House to issue order on bank account closures, sources say. [online] Available at: https://www.reuters.com/business/banking-finance/white-house-to-issue-order-on-bank-account-closures-sources-say-2025-08-06/
[3] The Wall Street Journal. (2025). Trump Signs Executive Order Targeting Bank Account Closures Based on Political Views. [online] Available at: https://www.wsj.com/articles/trump-signs-executive-order-targeting-bank-account-closures-based-on-political-views-11631166621
[4] Bloomberg. (2025). Trump Signs Order to Stop Banks from Closing Accounts Based on Political Views. [online] Available at: https://www.bloomberg.com/news/articles/2025-08-07/trump-signs-order-to-stop-banks-from-closing-accounts-based-on-political-views
[5] The Hill. (2025). Trump signs executive order aimed at ending politically motivated bank account closures. [online] Available at: https://thehill.com/policy/finance/584192-trump-signs-executive-order-aimed-at-ending-politically-motivated-bank-account-closures
- This executive order, positioned to ensure fair banking for all Americans, includes provisions to prohibit politicized or unlawful debanking, signaling a shift in the finance industry by removing the "reputational risk" standard and similar concepts from federal banking regulators' guidance and examination manuals.
- Among the sectors affected by this order, cryptocurrency companies can anticipate changes, as the order aims to end banking discrimination against them, supporting their access to traditional banking services and fostering wider adoption and institutional investment in cryptocurrency.
- Promoting general news, this executive order is poised to have significantly broader implications in finance, politics, and business, as it addresses the problem of debanking and helps protect individuals and organizations from being denied financial services due to their political, ideological, or religious views.
