Big banks are now in Trump's crosshairs
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President Trump facing reporters at the White House. Photo: Win McNamee/Getty Images
President Trump is planning an executive order that would punish banks if they are believed to be discriminating against political conservatives.
Why it matters: The president has previously targeted law firms and media companies, but with banks — one of the most heavily regulated industries — the administration has a number of levers it can pull to apply pressure.
Driving the news: Appearing on CNBC on Tuesday morning, Trump seemed to give a nod to a Wall Street Journal report that the White House is preparing an executive order directing regulators to penalize any bank found to have dropped a client on political grounds.
- The president accused JPMorgan Chase and Bank of America of discrimination by refusing to take his personal business.
The big picture: A number of conservatives and crypto executives have claimed for years they were "debanked" for political reasons, and the Senate Banking Committee held a hearing on some of those claims in February.
- Both JPMorgan and Bank of America have said that political reasons are not a factor in their customer decisions.
- "We don't close accounts for political reasons, and we agree with President Trump that regulatory change is desperately needed," a JPMorgan spokesperson says. "We're pleased to see the White House is addressing this issue, for which we've been advocating for many years, and look forward to working with them to get this right."
- The banking industry has also pointed to anti-money-laundering and reputational risk regulation as possible factors in restricting access. "We should get these rules right," Bank of America CEO Brian Moynihan told CNBC on Tuesday afternoon, adding that the president was on the right issue.
- Indeed, bank regulators have recently dropped reputational risk as part of their scrutiny.
The intrigue: For the president, the political is clearly personal.
- On CNBC, Trump said of JPMorgan: "I had many, many accounts loaded up with cash. I was loaded up with cash. And they told me, 'I'm sorry, sir, we can't have you. You have 20 days to get out.' I said, 'You got to be kidding. I've been with you for 35, 40 years.'"
Reality check: Trump was a businessman before becoming a conservative politician.
- In a 2019 article about investigations into Deutsche Bank, The New York Times noted that in recent decades, the German bank "was the only mainstream financial institution consistently willing to do business with Mr. Trump, who had a history of defaulting on loans. "
What to watch: If and when an executive order comes out (the WSJ cautions the administration's plans could change), it will indicate whether banks' regulatory burden becomes heavier or lighter under this administration.
Editor's note: This story has been updated with comments by Bank of America's CEO.
