Late last year, we predicted that the Trump administration would bring federal action to target de-banking, and on August 7, 2025, President Trump signed a much-anticipated executive order to address the issue. Banks and credit unions should now expect to feel the impact early on in the form of horizontal reviews and inquiries from their banking regulators.
The order announces that the official policy of the Trump Administration is that banks must make decisions “on the basis of individualized, objective, and risk-based analyses,” and that Americans should not be “denied access to financial services because of constitutionally or statutorily protected beliefs, affiliations, or political views.” Additionally, the order sets forth the policy “that politicized or unlawful debanking is not used as a tool to inhibit such beliefs, affiliations, or political views.” Additional sections of the order set out an intent to protect “lawful business activities that the financial service provider disagrees with or disfavors for political reasons.”
Among other things, the order directs federal banking regulators, including the Consumer Financial Protection Bureau (CFPB), the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC) and the National Credit Union Administration (NCUA) to identify financial entities that may have engaged in the type of debanking that is now contrary to the Administration’s stated official policy. Specifically, the order requires the regulators to identify entities that “have had any past or current, formal or informal, policies or practices that require, encourage, or otherwise influence such financial institution to engage in politicized or unlawful debanking.” This exercise is to be completed within the next 120 days.
Importantly, the phrase “politicized or unlawful debanking” is defined in the executive order as follows:
The term “politicized or unlawful debanking” refers to 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 of any customer or potential customer on the basis of the customer’s or potential customer’s political or religious beliefs, or on the basis of the customer’s or potential customer’s lawful business activities that the financial service provider disagrees with or disfavors for political reasons.
If politicized or unlawful debanking practices are identified during the upcoming reviews, the federal banking agencies are directed “to take appropriate remedial action,” which may include “levying fines, issuing consent decrees, or imposing other disciplinary measures.” The order specifically cites to section 5 of the Federal Trade Commission Act (15 U.S.C. 45), section 1031 of the Consumer Financial Protection Act (12 U.S.C. 5531), and the Equal Credit Opportunity Act as possible sources of authority for an agency alleging that prior debanking practices violated federal law. This suggests that the government will claim that politicized or unlawful debanking constitutes an unfair act or practice or is unlawful discrimination if based upon an enumerated prohibited basis under the Equal Credit Opportunity Act. That could apply, for example, if action was taken based upon a customer’s religion.
Banks and credit unions should, expect to see horizontal reviews and inquiries from the banking regulators, some of which have been quiet recently on the supervision and enforcement fronts. While past practices cannot retroactively be changed, being prepared for upcoming information requests and getting a better understanding of potential risks from historical policies and practices would be prudent and can mitigate the inevitable stress of an off-cycle and otherwise unanticipated in-depth supervisory review.
Additionally, within 180 days, the federal banking regulators are also directed to “review their current supervisory and complaint data to identify any financial institution that has engaged in unlawful debanking on the basis of religion.” As mentioned above, this could implicate the prohibitions of the Equal Credit Opportunity Act. If any offending entities are unable to ensure compliance, the agencies are instructed to “refer such matters to the Attorney General for an appropriate civil action.” This raises an additional prospect of potential scrutiny for financial entities based upon complaint data and other information previously provided to their regulators.
Financial entities outside the bank and credit union categories should also take note. The executive order extends to “other financial services provider[s]” and directs all member agencies of the Financial Stability Oversight Council to implement the executive order. And “politicized or unlawful debanking,” perhaps counterintuitively, is defined to include restrictions or denials of any financial services – not just loans and bank accounts. All financial entities subject to regulation by one of those agencies should be considering the potential application of the Guaranteeing Fair Banking for All Americans order to their specific situation.