Former President Donald Trump’s initiative against U.S. debanking of contentious sectors, including digital assets, has prompted a new report from the Office of the Comptroller of the Currency. This report corroborates previous practices and alerts banks of possible penalties for their alleged involvement.
The OCC is urging banks to comply with President Trump’s executive order from August, which instructed a cessation of debanking and to penalize those that have unjustly excluded legal clients from banking services. Trump’s order required regulators to investigate firms under their jurisdiction that engaged in debanking and to take action against them, which could include imposing fines, issuing consent decrees, or applying other disciplinary measures against any financial institution falling under such federal oversight.
The OCC’s concise report reviewed nine of the largest U.S. national banks and found that “between 2020 and 2023, these banks upheld both public and internal policies limiting access to banking services for certain industry sectors by necessitating elevated reviews and approvals prior to granting financial service access.” It noted that some major banks created higher barriers for controversial or environmentally sensitive enterprises, particularly those that conflicted with the bank’s own ethical standards.
The banks mentioned—such as financial powerhouses JPMorgan Chase & Co., Bank of America, and Citigroup Inc.—are referenced with links to their former public policies, particularly concerning environmental matters.
“The OCC plans to hold these banks responsible for any illegal debanking actions, including making referrals to the attorney general,” the report indicated, though specific legal violations remain unclear. Trump’s earlier executive order referenced laws regulating unfair competition in commerce, which notably exempts banks. Additionally, it cited a law against unfair consumer practices.
However, the report did not provide such legal references, and an OCC representative did not respond to a CoinDesk inquiry regarding potential legal violations and their path towards prosecution.
Toward the end of Trump’s administration, the OCC had rapidly established a rule requiring banks to evaluate potential customers based on quantifiable risk factors rather than denying entire categories of businesses, including firearms manufacturers, adult entertainment, payday loan providers, coal mining, and cryptocurrency companies. However, this rule was sidelined at the onset of former President Joe Biden’s term, leaving the matter unresolved.
Furthermore, the report cited OCC bulletins, the agency’s initiative to eliminate “reputational risk” as a factor in the regulation of financial entities, and Trump’s directive. The presidential order itself is not legislation, but rather a directive to regulatory bodies, not directly to banks.
Despite calls from Republican lawmakers and conservative groups for a response to the debanking that cryptocurrency firms and executives have criticized, the OCC’s report did not assume enough accountability to satisfy everyone.
“While the OCC outlined instances of debanking, it neglected to mention some of the most prominent reasons for debanking,” stated Cato Institute Policy Analyst Nicholas Anthony. “The report rebukes banks for cutting ties with contentious clients but fails to acknowledge that regulators explicitly evaluate banks based on their reputations.”
Last week, House Republicans released a report implicating U.S. banking regulators in the ongoing debanking narrative of recent years.
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