Violators could be subjected to monetary penalties, consent decrees, or other disciplinary measures.
The White House is reportedly preparing an executive order that would penalize banks for denying services to customers based on political reasons.
According to a report by The Wall Street Journal, citing a draft version of the order, the Trump administration will direct banking regulators to determine whether any financial institutions have violated the Equal Credit Opportunity Act, antitrust laws, or consumer financial protection laws.
Violators could be subjected to monetary penalties, consent decrees, or other disciplinary measures, as outlined in the draft. Banks could face punishment if they do not provide services to cryptocurrency firms, as well, according to the report.
Trump could sign the order as soon as this week, the report said, before adding that the order could still get delayed or that the administration’s plans can change.
Retail sentiment on Stocktwits about JPMorgan Chase & Co. and Wells Fargo was in the ‘bearish’ territory at the time of writing, while traders were ‘bullish’ about Bank of America.
Trump and conservative allies have accused banks of bias against businesses such as weapons, tobacco, and the fossil fuel industry. In January, Trump publicly rebuked the CEOs of the Bank of America and JPMorgan for denying conservatives access.
Banks have refuted these claims, stating that outdated, stringent regulations prevent them from offering services to customers on certain occasions.
The draft order reportedly doesn’t name any specific banks. Still, it appears to mention an incident where Bank of America was accused of shutting down the accounts of a Christian organization operating in Uganda based on its religious beliefs. The bank has defended itself by saying that it took the step because the organization doesn’t serve small businesses operating outside the U.S.
According to the report, the draft order also criticizes the role some banks played during the investigation into the Jan. 6, 2021, riots at the U.S. Capitol. Republicans have criticized lenders in the past, like the Bank of America, for voluntarily handing over a list of customers who purchased firearms in or around the riots to the Federal Bureau of Investigation.
It also directs regulators to review and eliminate any policies that may have contributed to banks dropping some customers. It also directs the Small Business Administration to review the practices of banks that guarantee the agency’s loans.
JPMorgan stock has risen over 22% this year, while Wells Fargo has gained 10.1% and Bank of America is up 3.9%.
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