One of the first public comments that U.S. President Donald Trump made after he took office on Jan. 20 was during the World Economic Forum, when he publicly rebuked the CEOs of top banks in the United States, accusing them of denying service to conservative customers.
“And by the way, speaking of you … you’ve done a fantastic job,” Trump said over a video link, addressing Brian T. Moynihan, chair, president and CEO of Bank of America. “But I hope you start opening your bank to conservatives because many conservatives complain that the banks are not allowing them to do business within the bank, and that included a place called Bank of America.”
Trump’s statement is not entirely false, but it is not the whole truth. What he describes is a problem that has for years affected large segments of the population, both domestically and internationally, usually low-income people as well as charities that serve populations in predominantly Muslim countries and elsewhere in the Global South. And more recently, this issue has begun to affect wealthy conservatives.
Known to industry insiders as de-banking, the shadowy practice refers to when a bank abruptly closes the account of an individual or a business without providing cause or recourse. This often automatically puts the de-banked entity on a “do not bank” list, making it nearly impossible — or impossibly expensive — for the person, business or nonprofit to be able to open another bank account. It is a form of economic exile, which can push a small business precipitously into bankruptcy and a nonprofit into spooking its funders, and it can levy undue expenses on an individual who must then rely on predatory payday lenders for simple financial transactions like cashing a paycheck and paying bills.
For years, perhaps even decades, de-banking has affected hundreds of millions of people around the world, including millions of Americans — and not just conservatives, as Trump, GOP lawmakers and a growing number of influencers in the area of speculative digital assets have asserted. (Those assets have included the crypto meme coins launched by the U.S. president and Melania Trump in January, to the tune of millions of dollars.) While politics can obscure the difference between victim and perpetrator, the crux of the issue remains bipartisan.
“Donald Trump was onto a real problem when he criticized Bank of America for its de-banking practices,” said Democratic Sen. Elizabeth Warren, who sits on the Senate Committee on Banking, Housing and Urban Affairs, during a Feb. 5 hearing titled “Investigating the Real Impacts of Debanking in America.” According to her, four banks accounted for half of all the complaints filed at the now-embattled Consumer Financial Protection Bureau (CFPB), her brainchild, which was established by an act of Congress in 2010: Bank of America, JPMorgan Chase, Wells Fargo and Citibank.
De-banked customers “all reported common themes,” continued Warren. “No warning. No explanation. No chance to dispute or appeal. They described how one day, all of a sudden, they lost their place in the banking system.” Nearly 12,000 de-banking complaints from U.S. consumers have been lodged in the past three years with the CFPB, which is being dismantled by Elon Musk’s Department of Government Efficiency (DOGE) as the tech billionaire and “special government employee” aims to fire almost all of its staff and wind down the agency. “We know from the consumer complaint hotline that millions of Americans — of all political stripes — have had the same experience. Tens of millions of customers have been blacklisted by the banking industry,” she added, lamenting DOGE’s move.
In the U.S., de-banking has traditionally affected poor people, minorities and people with disabilities. One in 10 Americans is currently unbanked or has been unbanked at some point during the last year, according to statistical analysis presented by Brookings Institute Senior Fellow Aaron Klein during his sworn testimony last month before the Senate Committee on Banking, Housing and Urban Affairs. He added that the U.S. fares among the worst industrialized economies when it comes to guaranteeing its citizens continuous access to financial services. Universal banking is the norm in countries like the United Kingdom, Canada and Germany, where almost everyone (more than 99.5% of people) has a bank account. One of the leading causes of de-banking in America is poverty, which can afflict active duty military personnel and veterans. Banks will unfairly take a longer time than they need to clear deposits, including paychecks, while at the same time hastening to charge the customer overdraft fees, which push low-income customers into debt with their own bank before their bank account is forcibly closed for unpaid fees.
“Not having a bank account adds significant cost, makes people financially and physically less healthy and makes it harder to access future opportunities and fully participate in America’s increasingly digital economy,” Klein told New Lines. “Had America instituted real-time payments when the United Kingdom did in 2008, people working paycheck to paycheck would have saved over $100 billion that instead has gone to overdraft fees, check cashers and payday lenders. Access to faster payments is one way we could help make this happen and reduce de-banking,”
De-banking also has an international component. Many U.S. citizens living abroad experience being de-banked, or they are refused service to begin with because of their U.S. citizenship (the latter happened to this reporter on at least two occasions). International bank representatives say the tedious recordkeeping requirements placed upon them by U.S. regulators, who aim to curtail tax evasion by Americans abroad, make it too expensive for banks to comply. It is cheaper for a bank to deny service to all U.S. citizens, unless prospective clients are wealthy enough for their transactions to outweigh the compliance costs to the bank.
Countries whose financial regulators work closely with the U.S., like the U.K., have also been facing a de-banking crisis that has gone underreported — until, it seems, a high-profile politician personally experienced it. In 2023, British parliamentarian Nigel Farage was de-banked from Coutts, a prestigious private bank owned by NatWest, in a move that set off a storm of accusations that banks were closing the accounts of people with controversial political views. The national scandal, which led to the resignation of NatWest’s chief executive, Dame Alison Rose, brought to the forefront the stunning statistic that over 1,000 bank accounts are forcibly closed every day in the U.K., according to British watchdog the Financial Conduct Authority. Many of these closures apparently occur abruptly when a customer receives money from, or sends money to, certain countries.
One of the more overlooked aspects of de-banking is the ripple effect it can have on vulnerable populations around the world. For years, perhaps decades, international aid organizations and even U.S.-registered nonprofits working internationally have been quietly de-banked, without recourse, for reasons not disclosed to them by their bank. This often occurs when the U.S. puts economic sanctions on specific individuals within a foreign government like, say, Russia’s Vladimir Putin and specific Russian oligarchs. To avoid the risk of running afoul of U.S. sanctions, which can lead to hefty fines, international banks will often respond by engaging in what insiders call “de-risking.” Another shadowy practice, de-risking means that a bank will close the accounts of customers who are born in Russia, have an address in Russia or have a Russian-sounding name; they might even de-bank organizations that have someone like that on their board or among their staff, investors or affiliates, without giving them the opportunity to clear their name or appeal the decision. Often, if one bank has de-risked in this way, then other banks will follow and the de-banked person (or organization) will no longer have access to the financial system.
Indeed, de-risking leaves international and U.S.-based charities and aid organizations — especially those that operate in or near countries that are subject to U.S. economic sanctions — with the constant threat of losing access to the financial system due to vaguely written U.S. regulations meant to curb terror financing and money laundering.
For example, one U.S.-based nonprofit that aimed to provide online medical training and psychological trauma relief seminars to civilians in wartime Syria, who were stranded in areas under constant aerial bombardment, saw its bank account abruptly shut down by its longtime bank. The bank offered no reason or recourse, other than “some vague concerns about terrorism,” an insider from the nonprofit told New Lines. They added that the matter was handled quietly as the nonprofit found another bank, and that publicizing the event could have smeared the nonprofit with “terrorism,” potentially spooking away its own funders, a sentiment echoed by many international nonprofits that serve populations in predominantly Muslim countries. Indeed, as insiders have confided with this reporter, it is better to keep quiet about having been de-banked and hope to find another financial institution to work with than to complain and publicize the matter and risk being painted with a wide brush of “terrorism financing or money laundering.”
U.S.-based small charities that accept donations from individuals for causes in the Middle East, for example, often request that donors not write trigger words such as “Islam” or “Gaza” in their online financial transactions, as the mere mention can sometimes lead to account closure without explanation. This routinely happens to Americans with “Muslim or Armenian names … and even people with mistaken identity” who see their bank accounts closed and have no recourse to appeal the bank’s decisions or prevent their name from being blacklisted with other banks that might otherwise service them, according to Warren, who cited the thousands of complaints lodged with CFPB.
In more recent years, the issue of de-banking has bled into other segments of the population, namely those who are wealthier and more aligned with conservative special interest groups like gun manufacturers and cryptocurrency exchanges. Even Melania Trump says she has felt the sting of de-banking. “When we left the White House and I established my own business … the bank suddenly informed me they will not be able to do business with me anymore,” she said during an interview on Fox during the Trump presidential campaign last year.
Though it was not immediately clear what business account Melania was referring to, a controversial, Obama-era Department of Justice initiative, dubbed Operation Choke Point, discouraged banks from working with businesses deemed to be “high-risk,” including those involved in cryptocurrency and other digital assets. Operation Choke Point cast a long shadow on businesses that operate in gray areas of the law, like marijuana dispensaries (marijuana is legal in some states but illegal at the federal level), manufacturers of semiautomatic weapons (legal at the federal level but politically contentious) or prostitution (legal in Nevada only).
New Lines has learned that many entrepreneurs, especially women, who use words like “massage,” “intimacy” or “human sexuality” on their websites often find they are unable to secure access to the financial system. This includes the inability to process payments from their clients through Visa or Mastercard, potentially affecting businesses that offer physical therapy and massage.
“When I called to complain, they told me they can’t support ‘sex work,’ and I’m like, uh, I’m not a sex worker,” one therapist who specializes in female sexual dysfunction and trauma said on condition of anonymity.
GOP lawmakers contend there is now a Biden-era “Operation Choke Point 2.0” that “targets conservatives.” Though no substantive evidence has surfaced to indicate the existence of something similar to the Obama-era program, digital asset businesses are growing increasingly vocal about being de-banked.
These concerns were amplified in November, when billionaire venture capitalist Marc Andreessen asserted on The Joe Rogan Experience that he knew 30 tech founders who had been de-banked.
The founder of Anchorage Digital, an accredited crypto repository, also gave testimony during the Senate hearing about how his business was de-banked and, as a result, forced to layoff employees and scale back services to clients.
Cryptocurrency has galvanized many Trump voters beyond crypto tech circles. It has become strangely popular with MAGA voters who are neither wealthy nor techie, including groups like flat-earthers who subscribe to some of the most outlandish conspiracies. Among these is a belief that the banking sector as we know it will collapse “very soon,” that the world economy will move to blockchain and, therefore, that they had better move their money there “as soon as possible.”
Though Trump was skeptical about cryptocurrency during his first term, earlier this month he announced that he would create a national “crypto strategic reserve,” prompting alarm even from his own crypto tech supporters, who decried using taxpayer dollars to purchase such a volatile and untested asset when the country is running a $1.8 trillion deficit. (The U.S. government currently holds a significant amount of bitcoin, a popular cryptocurrency, that was primarily acquired through money laundering asset seizures.)
But Trump, proudly calling himself the world’s first “crypto president,” has vowed to make America the “crypto capital of the planet.” He promised to overhaul regulations of digital assets and to normalize risky investments in mainstream investment portfolios, even as many bankers and wealth managers tread carefully and caution their clients against such investment.
So far, about a dozen states have passed or proposed legislation to tackle the issue of de-banking, with firmly red states like Georgia, Florida and Tennessee leading the way to protect consumers against losing access to the financial system because of their political or religious beliefs and affiliations — what Melania Trump calls in her book the “venom of cancel culture.”
Moving forward, as the Trump administration continues to target regulation and consumer protection, it is unclear if the GOP-controlled Congress will have the political will to address the roots of de-banking and its ramifications for everyone who is disenfranchised by it, or if they will simply protect favored pet businesses, folding the issue into a larger discourse around culture wars while ignoring the ill effects of de-banking on everyone else.
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