New revelations suggest that after the January 6 Capitol attack, the Biden administration quietly encouraged financial institutions to sever ties with former President Donald Trump. While no official directive exists on paper, bank insiders describe a subtle but firm push to avoid doing business with Trump and others deemed politically sensitive.
Pressure from Regulators Without a Paper Trail
No smoking gun memo or formal written order has surfaced demanding banks drop Trump as a client. Yet several major banks and financial institutions reportedly felt the heat from federal regulators like the Office of the Comptroller of the Currency, the FDIC, and the Federal Reserve.
The strategy was less about direct commands and more about implied consequences. Banks that continued to serve Trump or other controversial sectors risked increased scrutiny, enforcement actions, or hefty fines. “It wasn’t worth the hassle,” one official reportedly told the New York Post.
According to Trump’s own complaints, JPMorgan Chase gave him 20 days to move “hundreds of millions of dollars” out, while Bank of America declined his attempt to deposit over a billion dollars. But these two banks were not alone. The Post claims at least 10 other institutions cut ties with Trump-linked businesses after he left office in 2021.
Beyond Trump: The Wider Impact on Controversial Industries
The pressure extended far beyond Trump’s sprawling real estate and resort empire. Regulators targeted a range of industries viewed as politically or socially contentious by the current administration. Crypto firms, gun-related businesses, and some conservative religious organizations reportedly found themselves on the regulatory chopping block as well.
Financial institutions were caught in a tough spot. Serve these clients, and risk regulatory headaches; drop them, and face backlash from those sectors and political allies. For many banks, the cost-benefit analysis leaned toward cutting ties.
A Capital One lawsuit filed by Trump’s company adds another layer to the story. Trump alleges that Capital One closed over 300 accounts linked to his businesses without clear justification. Capital One denies politically motivated closures but has not publicly detailed the reasons behind the account actions.
Trump’s Executive Order Aims to Rein In “Debanking”
In response to these allegations and growing criticism, Trump signed an executive order in early August aimed at curbing so-called “debanking” practices. The White House described the order as a move to ensure federal regulators do not pressure banks to deny or restrict services based on political considerations.
This comes amid heightened debate over whether financial institutions have become arbiters of political acceptance, potentially weaponizing banking relationships against opponents. The order signals an intent to bring more transparency and fairness to how banking decisions are made.
However, critics argue that regulators are still justified in managing “reputational risk,” and banks must protect themselves from potentially damaging clients. The gray area between prudent risk management and political targeting remains fiercely contested.
The Broader Political and Financial Fallout
This story strikes at the heart of the uneasy relationship between politics and finance in America. Banking is traditionally viewed as apolitical — a basic utility rather than a political weapon. But these recent moves suggest otherwise.
For Trump, losing access to financial institutions means more than inconvenience. His empire depends on smooth banking relationships for everything from payroll to real estate transactions. For the banks, walking this tightrope involves managing reputational concerns and regulatory expectations.
Meanwhile, the question lingers: If powerful figures like Trump can be “debanked,” what about smaller players caught in the political crossfire? Could banking services become contingent on political views? That slippery slope worries many.
What’s Next?
The fallout from these revelations will likely fuel further legal and political battles. Investigations into whether regulators overstepped their authority may intensify. Banks may reassess their risk policies to better balance regulatory pressures and fairness.
Trump’s executive order could push federal regulators to adopt clearer guidelines on their interactions with financial institutions. Yet, the challenge remains: how to ensure banks neither enable wrongdoing nor become political gatekeepers.
One thing is clear — the intersection of politics and banking is more fraught than ever, and everyone involved will be watching closely.
