The Office of the Comptroller of the Currency (OCC) has released a report stating that the nine largest U.S. banks had placed restrictions on providing financial services to certain controversial industries between 2020 and 2023. This practice, commonly described as ‘debanking,’ involved refusing services or requiring higher levels of scrutiny beyond actual financial risks. The OCC’s review began following an executive order signed by then-President Donald Trump, directing a review of banks for practices that might bar customers based on political or religious beliefs.
Comptroller Jonathan Gould stated that it was ‘unfortunate’ the banks implemented these policies, considering it an inappropriate use of their government-granted charter and market power. The OCC plans to hold banks accountable for these actions and prevent future unlawful debanking. The agency’s ongoing review includes examining ‘thousands’ of complaints for debanking based on political or religious beliefs, with potential referrals to the Justice Department.
The report identified industries facing difficulties securing banking services, including oil and gas, cryptocurrency, tobacco and e-cigarette manufacturers, and firearm companies. Many banks publicly disclosed policies tied to environmental, social, and governance goals. Some banks also heightened reviews based on negative media coverage. The banks named in the report include JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, U.S. Bank, Capital One, PNC, TD Bank and BMO Bank, most of whom declined to comment.
The Bank Policy Institute, a trade organisation for larger banks, stated that banks aim to serve as many customers as possible and welcomes clarity from the government. The group supports fair access to banking and is working with Congress and the administration to ensure banks can serve law-abiding customers while maintaining sound risk management. Regulators are also reassessing their policies, with all three major U.S. bank regulators agreeing to eliminate the use of ‘reputational risk’ by examiners, which banks claimed pressured them to avoid contentious industries.
