The White House is preparing an executive order that would penalize banks for cutting off customers over their beliefs.
The order, reported on by the Wall Street Journal, is expected to be signed by President Donald Trump as early as this week. It would direct banking regulators to investigate whether financial firms violated the Equal Credit Opportunity Act or other consumer protection laws when closing accounts.
While the order could still be altered, it would bring further stability to the crypto sector. During the Biden administration, a coordinated effort from the federal government other than de-banking crypto firms, an effort known as Operation Chokepoint 2.0.
The draft order does not name specific banks, but it reportedly references an incident involving Bank of America and a Christian nonprofit in Uganda. The bank said it closed the accounts because it does not serve small businesses operating abroad.
The initiative is part of a broader push by the Trump administration to stop debanking, the practice of denying financial services for ideological reasons.
Banks say their decisions are often driven by concerns about money laundering and regulatory scrutiny, and have blamed regulatory pressure for avoiding the crypto industry.
The order calls for regulators to refer violations to the attorney general. The Justice Department has already taken steps in the order’s direction, launching in April a task force to investigate claims that banks were denying customers access to credit or financial services based on “impermissible factors,” the WSJ’s report adds.
Banks have been updating their policies and met with Republican attorneys general, trying to avoid further conflict, per the report.
Still, the crypto and wider fintech sector may still face banking difficulties. Venture capital firm Andreessen Horowitz (a16z) has warned that banks are making it more expensive for customers to use these apps in what could be seen as “Operation Chokepoint 3.0.”
That is a reference to banks are accepting crypto and fintech businesses as clients, but charging them hefty fees to access account data or move money, affecting services like Coinbase or Robinhood and potentially strangling competition.