Debanking Probe Reveals Banks Cut Off Diverse Groups, Regulator Says

An investigation initiated by a former Trump administration regulator has found that major U.S. banks have cut off services to a range of businesses and individuals, including those associated with conservative causes and progressive political groups. The probe, led by the Treasury Department’s Office of the Comptroller of the Currency (OCC) under Acting Comptroller Brian Brooks, examined de-risking practices by financial institutions.

Brooks, who served as acting comptroller in 2020, stated that the OCC's investigation uncovered examples of banks terminating relationships with merchants involved in firearm sales, as well as groups with conservative political affiliations, sometimes labeled as "MAGA sellers." Simultaneously, the probe also identified instances where banks had severed ties with Democrat-aligned groups. This suggests that the de-risking decisions were not exclusively politically motivated but rather part of broader compliance strategies.

Brooks indicated that these actions by banks were often justified by concerns over reputational risk or compliance with anti-money laundering regulations. However, the broad scope of entities affected, spanning from politically active organizations to businesses in specific sectors, has raised questions about the fairness and transparency of these de-banking decisions. The investigation aimed to understand the extent to which banks were using political or social criteria in their decisions to close accounts, rather than purely financial risk assessments.