Trump Is Right on ‘Debanking’

Regulators have abused their power to cut off political opponents

WSJ editorial. Excerpts:

"bank examiners have pressed banks to cut off certain groups, businesses or individuals.

Starting in the mid-1990s, financial regulators started considering “reputational risk” in grading banks for safety and soundness. If a bank provides services to an unsavory business, examiners could sanction it. During Operation Choke Point, Obama regulators pushed banks to cut off gun retailers and payday lenders by deeming them reputational risks.

Regulators backed off after Republicans in Congress exposed the pressure campaign, but Biden appointees used the same tactic to clamp down on crypto. Banking regulators this year committed not to grade banks based on reputational risk, and Mr. Trump’s order directs them to remove it from guidance documents and examination manuals."

"But the FBI and Treasury abused the system [Bank Secrecy Act] to conduct a dragnet investigation of conservatives. A House Judiciary Committee report last fall detailed how the FBI “suggested” banks file SARs on “suspicious” people tied to the Jan. 6 riot so they could investigate them without a warrant. There’s no such thing as a “suggestion” from government overlords."

"Violations of the Bank Secrecy Act can lead to penalties of hundreds of millions of dollars"