During a Congressional hearing in February, Coinbase chief legal officer Paul Grewal testified that the Biden-era FDIC “bludgeoned the banks” with probes and questions around crypto and stablecoins until they “relented under the pressure.”
In April, President Trump’s second-oldest son, Eric Trump, whose own crypto industry efforts extend to Bitcoin mining firm American Bitcoin and decentralized finance initiative World Liberty Financial, revealed he was drawn into crypto after being “debanked” by numerous financial groups.
Trump’s Executive Order: Laws And Penalties In Focus
Bank regulators would be directed to examine whether any financial institutions violated antitrust statutes, consumer financial protection regulations, and fair credit laws.
According to people familiar with the matter, President Trump could sign the executive order as early as this week. However, the order could still be postponed, and the administration’s plans may change, the WSJ noted.
Banks found in violation could face monetary penalties, consent decrees, or other disciplinary measures, the draft order reportedly indicates.
The order also instructs regulators to eliminate internal policies that may have contributed to debanking and directs the Small Business Administration to review its loan partner practices. It also requires regulators to refer some potential violations to the attorney general for follow-up.
In recent months, banks have reportedly responded by updating their policies to explicitly state they don’t discriminate based on political affiliation and even meeting with Republican state officials to demonstrate compliance.
Under the Trump administration, the Federal Reserve, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (FDIC) have also already promised to stop considering “reputational risk” when assessing banks’ customer relationships.
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