BY MIRABEL ODETA
Major U.S. banks are preparing for increased scrutiny as regulators move closer to releasing the results of a review into whether financial institutions improperly closed or restricted customer accounts because of political, religious or ideological connections.
The Office of the Comptroller of the Currency (OCC) is expected to publish findings from its supervisory review in the coming weeks. The review has examined whether major lenders, including JPMorgan and Bank of America, engaged in practices commonly referred to as “debanking” by cutting off services or refusing access to customers based on their beliefs, affiliations or business sectors.
The investigation has also looked into claims that banks denied services to industries that have faced political controversy, including fossil fuel companies, firearm manufacturers and cryptocurrency businesses. Critics argue that some financial institutions have used risk policies to unfairly exclude lawful businesses and organizations, while banks maintain that account decisions are based on compliance, security and financial risk assessments.
Debanking generally refers to situations where a bank suddenly closes an account or limits services for an individual or company. The issue has become a major political debate in the United States, particularly after former President Donald Trump directed federal authorities to examine what he described as politically motivated account closures.
Republican lawmakers and conservative groups have argued for years that some banks adopted policies influenced by progressive causes and unfairly targeted certain customers. Trump has also claimed that he personally experienced account closures because of political reasons. Banks have rejected those accusations, saying their decisions are based on standard banking rules, regulatory requirements and risk management procedures.
The controversy has pushed some major lenders to reconsider policies involving certain industries and customers. Several banks have publicly announced changes to their approaches, particularly in areas where they faced criticism from lawmakers and advocacy groups.
The OCC’s investigation follows an earlier report released in December that identified concerns involving several large banks between 2020 and 2023. The agency said some institutions had policies that restricted services to certain industries or required additional risk reviews because of reputational concerns. Regulators said they were examining those policies as well as roughly 100,000 related complaints.
Since the initial review began, regulators have conducted multiple rounds of inquiries, with some banks continuing to answer questions in recent weeks. Officials have reportedly focused on how lenders make decisions about opening, maintaining and closing accounts, including the internal processes used to evaluate customers.
The upcoming review is expected to identify specific cases and institutions. People familiar with the matter said regulators could recommend further action against some banks, including private supervisory orders requiring policy changes or public enforcement actions that could lead to financial penalties.
The banks under review include several of the largest financial institutions in the country, including JPMorgan, Bank of America, Citigroup, Wells Fargo, Capital One, U.S. Bank, PNC, TD Bank and BMO Bank. Representatives for the banks have declined to comment on the investigation.
Financial institutions have said they close accounts for a variety of reasons, including suspicious activity, incomplete documentation, regulatory concerns or accounts being used in ways that do not match their stated purpose. Banks insist that political views are not a factor in those decisions.
The investigation has also attracted attention from federal prosecutors. The U.S. Attorney’s Office in Washington is separately examining whether some banks violated financial laws connected to account decisions, according to people familiar with the matter.
OCC chief Jonathan Gould recently told lawmakers that the agency was making significant progress in its investigation and was exploring possible legal theories that could support enforcement actions.
The debate intensified after Trump accused JPMorgan and Bank of America of discriminating against conservatives. Trump and affiliated businesses have filed legal claims involving account closures, while the banks have denied wrongdoing.
One case that gained attention involved Indigenous Advance Ministries, a Christian charity based in Memphis that operates in Uganda. The organization accused Bank of America of closing its accounts because of its religious connections. The bank responded that the account closure was related to the organization’s activities involving debt collection and overseas operations, not its religious identity.
Another complaint involved Sam Brownback, a Republican former governor and religious freedom advocate, who said JPMorgan closed an account connected to him because of his beliefs. JPMorgan said the closure occurred because the bank lacked sufficient information needed to maintain the account.
Some banks have already begun adjusting their policies. JPMorgan removed restrictions affecting several industries, including civilian firearm businesses, after pressure from advocacy groups and following a presidential executive order. Citigroup also ended a previous policy that limited certain firearm-related services for retail customers.
Despite the political attention surrounding the issue, legal experts say the path for regulators to take enforcement action remains uncertain. Many of the groups involved in complaints may not fall under existing fair lending protections, creating questions about what laws regulators could use.
The Washington investigation is reportedly examining whether banks violated the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, a law historically used in cases involving financial misconduct. It remains unclear whether the OCC is considering the same legal approach.
Legal experts have suggested regulators could argue that banks improperly relied on vague reputational concerns when making account decisions. Critics of those policies say financial institutions should not deny services to lawful customers because of concerns about public criticism.
As regulators prepare to release their findings, the debate over banking access, political neutrality and corporate decision-making is expected to remain a major issue for U.S. financial institutions.
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