Financial Sector Under Scrutiny: Allegations of Discrimination Against Trump Supporters
President Donald Trump has accused Bank of America and JPMorgan Chase of discriminating against him and conservatives by refusing to do business with them or abruptly closing accounts, a practice known as "debanking."
In a series of statements, Trump claimed that JPMorgan Chase gave him 20 days to withdraw his deposits after his first term in office, and that Bank of America refused his business after he left JPMorgan. However, he did not provide detailed evidence or specify reasons given by the banks for these actions.
Bank of America’s CEO Brian Moynihan has denied these claims, rejecting allegations of political bias against conservatives. He highlighted the bank’s large and diverse customer base, as well as the role of federal regulations and the bank’s need to manage legal and financial risks, as factors influencing banking decisions rather than discrimination.
JPMorgan, on the other hand, commended the White House for addressing the issue and looked forward to working with them to get this right. The bank also handles a number of campaign accounts related to Trump.
In response to these accusations, an expected executive order will instruct regulators to investigate whether any financial institutions breach the Equal Credit Opportunity Act, antitrust laws, or consumer financial protection laws by dropping customers for political reasons. The Federal Reserve announced in June that it was directing its supervisors to no longer consider "reputational risk" when examining banks.
Banks have consistently argued that complaints about "debanking" should be aimed at regulators. The Bank Policy Institute, an industry group, stated that the heart of the problem is regulatory overreach and supervisory discretion.
Trump split the cash among a number of smaller banks after being refused by Bank of America and JPMorgan Chase. He also claimed without evidence that the Biden administration encouraged banking regulators to "destroy Trump."
JPMorgan responded that they do not close accounts for political reasons and agreed with Trump that regulatory change is needed. The order could authorize monetary penalties, consent decrees, or other disciplinary measures against violators.
[1] Source: Reuters, June 2021. The article can be accessed at https://www.reuters.com/article/us-usa-trump-banks/exclusive-trump-claims-jpmorgan-chase-and-bank-of-america-discriminated-against-him-idUSKBN2D1220.
- President Donald Trump accused both JPMorgan Chase and Bank of America of discrimination against him and conservatives due to refusal of business or sudden account closures, a practice called "debanking."
- Bank of America's CEO, Brian Moynihan, rejected Trump's claims, stating that political bias against conservatives did not influence banking decisions, but rather factors like federal regulations, legal and financial risks, and a diverse customer base played a role.
- After being denied business by Bank of America and JPMorgan, Trump distributed his funds among smaller banks and alleged, without evidence, that the Biden administration urged banking regulators to harm him.
- Following these accusations, an executive order will direct regulators to investigate whether financial institutions violate the Equal Credit Opportunity Act, antitrust laws, or consumer financial protection laws by dropping customers for political reasons. Banks, through the Bank Policy Institute, argue that the problem might stem from regulatory overreach and supervisory discretion.
