President Trump Signs Debanking Executive Order

On August 7, 2025, President Donald Trump issued an Executive Order entitled “Guaranteeing Fair Banking for All Americans” (the “Order”). The Order announces the Administration’s plan to address the exclusion of certain individuals and businesses from access to financial services by financial institutions of all sizes and types.¹ It does so by directing the federal banking regulators to undertake measures to end “politicized or unlawful” debanking by the government and financial institutions.

Specifically, the purpose of the Order includes a statement that “[F]inancial institutions have engaged in unacceptable practices to restrict law-abiding individuals’ and businesses’ access to financial services on the basis of political or religious beliefs or lawful business activities.” The Order further details “[i]t is the policy of the United States that no American should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations, or political views, and to ensure that politicized or unlawful debanking is not used as a tool to inhibit such beliefs, affiliations, or political views,” and states that “[b]anking decisions must instead be made on the basis of individualized, objective, and risk-based analyses.” 

The Order is effective immediately and will be implemented over the next 180 days. Federal banking regulators have already stated their intent to promptly comply with its directives. For their part, some banks have signaled that they intend to work with the Administration to protect access to banking. We expect Congress to closely follow these implementation efforts given the recent bipartisan investigations of and hearings on debanking by several committees.

In this Legal Update, we provide background on debanking and discuss the Order.

Background

In recent years, the topic of access to financial services, including the debanking of existing customers, has risen in prominence. This occurred in part due to government activities, such as Operation Choke Point’s use of supervisory authority to force financial institutions to monitor, evaluate and exit certain customers, as well as government pressure to use subjective assessment of reputation risk in evaluating banks and potential customers. Further, there have been concerns that individuals and their businesses (particularly those involved in digital assets) have been subjected to debanking on the basis of their political affiliations, religious beliefs or lawful business activities, and have suffered frozen payrolls, debt and other significant harms to their livelihoods, reputations and financial well-being.

While the first Trump Administration attempted to address the issue through a rulemaking by the Office of the Comptroller of the Currency (“OCC”), that action would have affected only certain large national banks, and in any event, was promptly rescinded by the Biden Administration. Then-Senator JD Vance and others in Congress co-sponsored legislation to prevent debanking and held hearings on the topic, but the banking sector began to see significant change only earlier this year when federal banking regulators, including the OCC, started to remove reputation risk from their supervisory guidance.

The Order

The Order establishes a national policy that no law-abiding American should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations or political views. It seeks to ensure that politicized or unlawful debanking is not used as a tool to inhibit such beliefs, affiliations or political views. The Order seeks to ensure that banking decisions be made on the basis of individualized, objective and risk-based analyses.

The Order defines “politicized or unlawful debanking” as an act by a bank or other financial services provider to adversely restrict access to, or adversely modify the conditions of, accounts, loans or other banking products or financial services on the basis of a customer’s or potential customer’s political or religious beliefs. It also includes adverse restrictions and modifications based on a customer’s or potential customer’s lawful business activities that a financial services provider disagrees with or disfavors for political reasons.

The Order directs the federal banking regulators, including the Small Business Administration (“SBA”), to undertake specific steps to end politicized and unlawful debanking. The Order includes that:

1. Within 180 days, federal banking regulators must remove the use of reputation risk or equivalent concepts that could result in politicized or unlawful debanking, as well as any other considerations that could be used to engage in such debanking, from supervisory materials and consider changing parts of regulations that could result in politicized or unlawful debanking. The Order further states that an institution or individual’s reputation should be considered only to the extent that it is necessary to do so to reach a reasonable and apolitical risk-based assessment of the institution or individual.
2. Within 60 days, the SBA must give notice to all financial institutions with which it guarantees loans under its lending programs that the institution is required to make reasonable efforts to: (i) identify, notify and reinstate any prior customers who were denied service through a politicized or unlawful debanking action; and (ii) identify and notify prior potential customers who were denied access to financial services (including payment processing services) through a politicized or unlawful debanking action, and provide such potential customers with an option to engage in the previously denied service.
3. Within 120 days, each federal banking regulator must conduct a review to identify financial institutions in their jurisdiction that have had policies or practices that require, encourage, or otherwise influence them to engage in politicized or unlawful debanking and take appropriate remedial action. Remedial action may include fines, entry of consent decrees and other disciplinary measures authorized by applicable law (e.g., UDAP provision of the FTC Act, UDAAP provision of the Consumer Financial Protection Act, Equal Credit Opportunity Act (“ECOA”)).
4. Within 180 days, the federal banking regulators must review their current supervisory and complaint data to identify financial institutions that have engaged in unlawful debanking on the basis of religion and, if such an financial institution is unable to come in compliance under ECOA, refer them to the Attorney General.
5. Within 180 days, the Secretary of the Treasury, in consultation with the Assistant to the President for Economic Policy, will develop a comprehensive strategy for further measures to combat politicized and unlawful debanking activities of financial regulators and financial institutions, including consideration of legislative or regulatory options to eliminate such debanking.

Implications

To the extent that they have not already done so, financial institutions should consider examining their policies and practices to identify actions that may result in politicized or unlawful debanking. Financial institutions should also review their reputation risk guidelines to ensure compliance with recent government updates. As with many compliance issues, self-identification and prompt remediation are likely to influence a regulator’s decision-making on potential penalties.

Additionally, the Order is unlikely to be the final word on debanking. At a minimum, regulators are likely to take action to implement Treasury’s comprehensive strategy to prevent politicized or unlawful debanking activities. Also, congressional committees are likely to continue to, investigate and hold hearings on debanking and the implementation of the Order. Further executive or congressional action is a strong possibility.

¹  While the Order is directed toward federal agencies that exercise supervisory and regulatory authority over banks, savings associations, and credit unions, it defines politicized or unlawful debanking to include acts “by a bank, savings association, credit union, or other financial services provider.”