On August 7, 2025, President Donald Trump signed an executive order titled “Guaranteeing Fair Banking for All Americans,” directing federal agencies to combat “debanking” — the denial or termination of financial services based on political views, religious beliefs, or industry affiliation. The executive order expands on numerous recent federal and state initiatives targeting debanking — including the joint U.S. Department of Justice (DOJ)/Commonwealth of Virginia Equal Access to Banking Task Force, two recent bills introduced in the U.S. Senate, and actions by the federal financial regulators to remove “reputation risk” as a supervisory consideration.
This Update examines the executive order, the existing debanking initiatives, and the implications for financial institutions navigating the second Trump administration's increasingly high-stakes regulatory landscape. Notably, the executive order requires federal regulators to review past practices within 120 days, making attention to the executive order implications a priority for regulated institutions.
I. The Executive Order — Federal Scrutiny of Past and Present Debanking Policies and Actions
President Trump’s fair-banking executive order is designed to ensure that federal regulators do not promote policies and practices that allow financial institutions to deny or restrict services based on political beliefs, religious beliefs, or lawful business activities, ensuring fair access to banking for all Americans.1
Section 1 of the executive order provides context for the Trump administration’s concerns, including that “[s]ome financial institutions participated in Government-directed surveillance programs targeting persons participating in activities and causes commonly associated with conservatism and the political right following the events that occurred at or near the United States Capitol on January 6, 2021.” According to the order, Americans may not be denied access to financial services based on constitutionally or statutorily protected beliefs, and “[b]anking decisions must instead be made on the basis of individualized, objective, and risk-based analyses.”2
The executive order goes on to define “politicized or unlawful debanking” as restricting or modifying access to financial services “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.”3
The implementation of the order falls primarily to the Secretary of the Treasury and the federal banking regulators, which are defined to include the Small Business Administration (SBA) and federal member agencies of the Financial Stability Oversight Council with supervisory authority over banks, savings associations, or credit unions.4
Key provisions of the executive order:
Guidance Withdrawal and Reform. Section 4(a) directs federal banking regulators to remove reputation risk and other equivalent concepts that enable politicized or unlawful debanking from all guidance documents, examination manuals, and other materials within 180 days.
SBA Requirements. Section 4(b) requires the SBA to notify lenders that participate in its loan guarantee programs of the applicable requirements of the executive order within 60 days. These institutions must then, within 120 days, identify and attempt to reinstate former clients and former applicants that were denied services or payment processing due to politicized debanking in violation of SBA requirements and notify affected parties of their renewed eligibility.
Strategic Development. Section 5(a) directs the Secretary of the Treasury to develop within 180 days “a comprehensive strategy for further measures to combat politicized or unlawful debanking activities of financial regulators and financial institutions across the Federal Government, including consideration of legislative or regulatory options to eliminate such debanking.”
Retroactive Review and Enforcement. Sections 5(b) and (c) requires federal banking regulators to review financial institutions for past or current policies encouraging politicized or unlawful debanking and take remedial actions. Specifically:
- Within 120 days, per Section 5(b), regulators must identify financial institutions with “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 and to take appropriate remedial action,” including levying fines, issuing consent decrees, or imposing other disciplinary measures for violations of applicable law.
- Within 180 days, per Section 5(c), regulators must review supervisory and complaint data to identify institutions that engaged in unlawful debanking based on religion and, if appropriate, refer such matters to the Attorney General “for an appropriate civil action” if the institution “is unable to obtain compliance within the meaning of 15 U.S.C. 1691 and 1691e(g)” under the Equal Credit Opportunity Act (ECOA).
The White House fact sheet accompanying the executive order identifies digital-asset firms as having been targets of unfair debanking practices.5 To that end, the fact sheet notes that “President Trump has already ended Operation Chokepoint 2.0 once and for all by working to end regulatory efforts that deny banking services to the digital assets industry.”6
II. The Joint DOJ/Virginia Equal Access to Banking Task Force
The fair-banking executive order builds on the recently announced DOJ/Virginia Equal Access to Banking Task Force, announced on April 28, 2025, by U.S. Attorney Erik S. Siebert of the Eastern District of Virginia, Assistant Attorney General Harmeet K. Dhillon of the DOJ Civil Rights Division, and Virginia Attorney General Jason Miyares.7
The Virginia Equal Access Task Force was formed to investigate debanking — when banks refuse customers access to credit and other financial services based on impermissible factors under current federal and state law. The task force determines whether allegations warrant government enforcement action or criminal prosecution and works with federal financial regulatory agencies to “bring the full power of the federal government to bear on this important issue.”8
While explicitly focused on “allegations of debanking actions taken against Virginians,” the task force accepts nationwide complaints through the Civil Rights Division’s portal and coordinates with federal regulators — positioning it as a potential model for broader DOJ enforcement efforts.
III. Congressional Action: The Fair Access to Banking Act and FIRM Act
Since President Trump’s second inauguration, Congress has pursued complementary anti-debanking legislation. Republican Sen. Kevin Cramer of North Dakota reintroduced the Fair Access to Banking Act in February, which would penalize financial institutions that deny services to creditworthy customers engaged in lawful businesses.9 The following month, Senate Banking Committee Chairman Tim Scott, Republican of South Carolina, introduced the Financial Integrity and Regulation Management (FIRM) Act to eliminate reputational risk from bank supervision.10
The Fair Access to Banking Act, as characterized by Sen. Cramer, builds on the original Fair Access Rule from President Trump’s first administration, which required financial institutions to make individual risk assessments rather than broad decisions regarding entire industries. The Biden administration paused the rule’s implementation in early 2021, but Sen. Cramer's legislation would establish these protections permanently.11
The FIRM Act would statutorily eliminate “reputational risk” as a supervisory measure by removing all references from safety and soundness determinations, prohibiting federal banking agencies from promulgating new rules using reputation risk, and requiring agencies to report to Congress on their elimination of reputation risk from supervisory frameworks.12 Chairman Scott characterized the FIRM Act as addressing the “weaponization of federal banking agencies,” stating that “federal regulators have abused reputation risk by carrying out a political agenda against federally legal businesses.”13
Both bills have received endorsements from financial industry groups including the American Bankers Association, Bank Policy Institute, and Financial Services Forum as well as organizations representing potentially affected industries such as the Blockchain Association and National Shooting Sports Foundation.
IV. The Elimination of Reputational Risk From Bank Supervision
Following Sen. Scott’s introduction of the FIRM Act, federal banking regulators began eliminating reputation risk from supervision. The OCC acted first on March 20, 2025, with Acting Comptroller Rodney E. Hood directing examiners to focus on measurable, objective risk categories — credit, operational, compliance, and strategic risk — rather than subjective notions of reputation risk.14 In an April 8, 2025, speech, FDIC Acting Chairman Travis Hill stated that the FDIC is working on a rulemaking that would “prohibit FDIC supervisors from (1) criticizing or taking adverse action against institutions on the basis of reputational risk and (2) requiring, instructing, or encouraging institutions to close, modify, or refrain from offering accounts on the basis of political, social, cultural, or religious views.”15 On June 23, 2025, the Federal Reserve Board announced that reputational risk will no longer be a component of examination programs in its supervision of banks.16 The fair-banking executive order now mandates this practice across all federal banking regulators.
V. State Activity to Address Debanking
Multiple states have also enacted legislation addressing debanking concerns. Tennessee enacted a fair access law on April 22, 2024, prohibiting financial institutions and insurers from denying services based on political views, religious beliefs, or any factor that is not a quantitative, impartial, and risk-based standard.17 Florida expanded its fair access law in May 2024, extending coverage to out-of-state financial institutions doing business in Florida and establishing a customer complaint process with the state's Office of Financial Regulation.18 Similar legislation has been introduced in nine additional states: Arizona, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, South Dakota, and South Carolina, demonstrating growing momentum for state-level fair access protections.19
Texas and West Virginia have taken a different approach, using state contracting power to combat industry-specific debanking. Rather than mandating fair access directly, these states restrict government business with financial institutions that deny services to disfavored sectors. Texas Government Code Chapter 2274 prohibits state contracts with companies that discriminate against firearm and ammunition industries, while Chapter 809 requires state divestment from financial companies that boycott energy companies. West Virginia Code § 12-1C-1 et seq. similarly restricts state business with financial institutions that boycott fossil fuel companies.20
VI. Compliance Considerations
The timelines in the fair-banking executive order are short. Within 120 days, regulators must identify financial institutions with “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 and to take appropriate remedial action,” including levying fines, issuing consent decrees, or imposing other disciplinary measures for violations of applicable law. That means regulators will be calling imminently.
In assessing what steps to take in response, financial institutions should be particularly mindful of two things that the fair-banking executive order does not do. First, the order does not create new legal grounds for action; it implicitly acknowledges that the banking agencies and DOJ, in scrutinizing banks’ choices, will likely be constrained to enforcing three key statutes: ECOA, Section 5 of the Federal Trade Commission Act (FTC Act), and Section 1031 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).21 Second, the executive order does not excuse banks’ compliance with other laws — such as the anti-money-laundering (AML) and countering the financing of terrorism provisions of the Bank Secrecy Act (BSA) and USA PATRIOT ACT, identity theft prevention provisions of the Fair and Accurate Credit Transactions Act, and sanctions law — or safety and soundness principles.
- ECOA has limited application, though its prohibition is clear when the law does apply. The statute prohibits discrimination in lending — including commercial lending — but (1) only in connection with a credit transaction and (2) only on a defined list of prohibited bases. Of the grounds for “unlawful debanking” discussed in the executive order, only religion appears in ECOA’s statutory prohibitions. ECOA does not protect “political affiliation” and “lawful business activity” described in the executive order, nor does it reach deposit accounts.22
- Unfair, Deceptive, or Abusive Acts or Practices Laws, including Section 5 of the FTC Act and Section 1031 of the Dodd-Frank Act, are framed more broadly but do offer useful legal parameters and precedent for anticipating how bank regulators are likely to evaluate debanking — other than religious discrimination in credit — for potential enforcement.
The unfairness doctrine, with decades of precedent under the FTC Act, is particularly instructive. An act or practice must cause substantial injury to consumers that is not reasonably avoidable by consumers themselves and that is not outweighed by countervailing benefits to consumers or competition. Depending on the circumstances, account closures are often involuntary, unilateral actions; the analysis thus shifts to the question of whether there is substantial injury or a sufficient countervailing benefit to consumers or competition generally — that is, a cost-benefit balancing of the practice taken as a whole.
Relying on “unfairness” in this context is, notably, the same approach that the CFPB took with respect to account suspensions in enforcement actions against several large banks under the previous administration. The angle of attack may be different, but the legal analysis is the same.
With that in mind, financial institutions should therefore consider the following in the near term:
- Review of Policies, Procedures, and Governance. Review current and legacy policies or procedures that reference (or previously referenced) reputation risk or equivalent concepts to determine whether they will withstand regulatory scrutiny. Clear policies, procedures, and standards for determining when to close or refuse an account that are tied to goals with public benefits will assist in demonstrating the “countervailing benefit” of the bank’s approach to account closures. Whenever possible, consider tying account closure standards to other regulatory obligations and objective, regulation-driven policies — such as the institution’s AML policy, identity theft prevention plan, elder and vulnerable persons policy, credit policy, or fraud risk management policy. Assess whether existing governance processes and controls are sufficient to minimize ad hoc determinations and conform decisions to policies.
- Documentation Requirements. Ensure that appropriate documentation is created and maintained for account termination decisions to demonstrate individualized, objective, and risk-based analyses. Examiners should be able to follow account closure decisions and understand the link between a particular decision and the bank’s policies.
- Reinstatement Processes. For institutions participating in SBA programs, establish procedures to review previously denied clients for potential reinstatement.
- Internal Audit of Past Account Closures. Conduct internal audits of past account closures or adverse actions to identify potential debanking issues before regulatory examinations begin.
- Religious Discrimination Review. Implement systems to identify and prevent religious-based discrimination in banking services, focusing in particular on credit products. Consider what products or business lines present a risk of religious discrimination in commercial lending.
- BSA/AML Compliance. Ensure that legitimate AML and sanctions compliance activities are clearly distinguished from prohibited discriminatory practices. Document specific suspicious activity indicators and ensure that decisions are based on actual risk factors rather than customer categories or affiliations. Exercise caution that policy changes to address the fair-banking executive order do not inadvertently undermine the bank’s AML program.
- Training Programs. Update compliance and front-line staff training to reflect the new requirements and prohibited considerations.
The fair-banking executive order represents the culmination of mounting federal and state efforts to combat debanking, building on the DOJ-Virginia Task Force, congressional bills, and regulators’ voluntary elimination of reputation risk. The executive order’s retroactive review provisions and enforcement mechanisms — including potential fines, consent decrees, and DOJ referrals — signal a new era of scrutiny for banking decisions. Financial institutions must now balance heightened fair access obligations with legitimate BSA/AML compliance, all while preparing for Treasury’s forthcoming comprehensive strategy. With federal regulators mandated to review past practices within 120 days, the financial services industry faces an urgent compliance imperative.
1 Executive order, “Guaranteeing Fair Banking for All Americans” (Aug. 7, 2025), https://www.whitehouse.gov/presidential-actions/2025/08/guaranteeing-fair-banking-for-all-americans/; Andrew Ackerman, Exclusive: White House to Target 'Debanking', WALL ST. J., Aug. 5, 2025; Alexandra Ulmer & Daniel Trotta, White House to Target Banks Trump Claims Discrimination, REUTERS, Aug. 6, 2025.
2 Id. at § 2.
3 Id. at § 3.
4 White House Fact Sheet: President Donald J. Trump Guarantees Fair Banking for All Americans (Aug. 7, 2025), https://www.whitehouse.gov/presidential-actions/2025/08/guaranteeing-fair-banking-for-all-americans/; see also Financial Stability Oversight Council, Member Agencies, https://home.treasury.gov/policy-issues/financial-markets-financial-institutions-and-fiscal-service/financial-stability-oversight-council/about-fsoc/council-members. The federal banking regulators include the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), Consumer Financial Protection Bureau (CFPB), National Credit Union Administration, and Federal Housing Finance Agency.
5 White House Fact Sheet: President Donald J. Trump Guarantees Fair Banking for All Americans (Aug. 7, 2025), https://www.whitehouse.gov/fact-sheets/2025/08/fact-sheet-president-donald-j-trump-guarantees-fair-banking-for-all-americans/.
6 The order also provides examples of what the Trump administration considers unlawful debanking, noting that "the Federal Government suggested that such institutions flag individuals who made transactions related to companies like ‘Cabela’s’ and ‘Bass Pro Shop’ or who made peer-to-peer payments that involved terms like ‘Trump’ or ‘MAGA,’ even though there was no specific evidence tying those individuals to criminal conduct.”
7 Press Release, U.S. Dep't of Justice, U.S. Attorney Announces Launch of Task Force to Combat Illegal Debanking in the Eastern District of Virginia (Apr. 28, 2025), https://www.justice.gov/usao-edva/pr/us-attorney-announces-launch-task-force-combat-illegal-debanking-eastern-district [hereinafter DOJ Press Release]; Press Release, Office of the Att'y Gen. of Va., Attorney General Miyares Joins Task Force to Combat Illegal Debanking (Apr. 28, 2025), https://www.oag.state.va.us/media-center/news-releases/2863-april-28-2025-attorney-general-miyares-joins-task-force-to-combat-illegal-debanking [hereinafter Va. AG Press Release].
8 Id.
9 Fair Access to Banking Act, S. 401, 119th Cong. (2025); Press Release, U.S. Sen. Kevin Cramer, Cramer Reintroduces Fair Access to Banking Act to Protect Legal Industries from Debanking (Feb. 5, 2025), https://www.cramer.senate.gov/news/press-releases/cramer-reintroduces-fair-access-to-banking-act-to-protect-legal-industries-from-debanking.
10 Press Release, U.S. Senate Comm. on Banking, Hous., & Urban Affairs, Scott Leads Effort to Combat Debanking (Mar. 6, 2025), https://www.banking.senate.gov/newsroom/majority/scott-leads-effort-to-combat-debanking.
11 Press Release, supra note 7; see also OCC, Fair Access Rule, 86 Fed. Reg. 4812 (Jan. 19, 2021) (describing original rule from first Trump administration).
12 Financial Integrity and Regulation Management Act, S. ___, 119th Cong. § 4 (2025).
13 Press Release, supra note 8.
14 Press Release, Office of the Comptroller of the Currency, OCC Ceases Examinations for Reputation Risk (Mar. 20, 2025), https://www.occ.treas.gov/news-issuances/news-releases/2025/nr-occ-2025-25.html; OCC Bulletin 2025-4 (Mar. 20, 2025).
15 View from the FDIC: Update on Key Policy Issues, Acting Chairman Travis Hill, Speech, American Bankers Association Washington Summit, April 8, 2025.
16 Press Release, Board of Governors of the Federal Reserve System (June 23, 2025), https://www.federalreserve.gov/newsevents/pressreleases/bcreg20250623a.htm.
17 2024 Tenn. Pub. Acts ch. 746 (H.B. 2100) (enacted Apr. 22, 2024, effective July 1, 2024) (codified at Tenn. Code Ann. § 45-1-134) (prohibiting financial institutions from denying services based on political views, religious beliefs, or non-risk-based factors).
18 2024 Fla. Laws ch. 140 (HB 989) (May 2, 2024) (codified at Fla. Stat. § 655.0323) (expanding fair-access requirements and complaint procedures administered by Office of Financial Regulation).
19 Fair Access to Banking Act, S. 401, 119th Cong. (2025); Press Release, U.S. Sen. Kevin Cramer, Cramer Reintroduces Fair Access to Banking Act to Protect Legal Industries from Debanking (Feb. 5, 2025), https://www.cramer.senate.gov/news/press-releases/cramer-reintroduces-fair-access-to-banking-act-to-protect-legal-industries-from-debanking.
20 Tex. Gov't Code ch. 2274, https://statutes.capitol.texas.gov/Docs/GV/htm/GV.2274.htm; Tex. Gov't Code ch. 809, https://statutes.capitol.texas.gov/Docs/GV/htm/GV.809.htm; W. Va. Code § 12-1C-1 et seq., https://code.wvlegislature.gov/12-1C/.
21 See fair-banking executive order § 5(b) (directing the banking agencies to take enforcement action when they conclude that a financial institution has “violated applicable law (including 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”).
22 By contrast the executive order omits the other forms of discrimination ECOA prohibits, that is, “on the basis of race, color, ... national origin, sex or marital status, or age ... [or] because all or part of the applicant’s income derives from any public assistance program.” 15 U.S.C. § 1691(a)(1), (2).
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