FDIC Set to Jump Into Trump’s Debanking Fight With New Plan

Core Viewpoint - US regulators are planning to introduce a proposal aimed at how banks' risks are scrutinized, particularly in response to concerns about the political motivations behind closing customer accounts [1][4]. Regulatory Proposal - The Federal Deposit Insurance Corporation (FDIC) is set to propose a rule that would explicitly prevent bank examiners from compelling banks to close customer accounts based on political, social, cultural, or religious reasons [2][3]. - The proposal will focus on the government's supervisory powers without imposing additional burdens on banks [2]. Debanking Concerns - President Trump has criticized the practice of debanking, where certain individuals and businesses are denied banking services, claiming that major banks like JPMorgan Chase & Co. and Bank of America Corp. have refused his business [4]. - Consumer advocates argue that there is limited evidence of widespread debanking, while critics suggest that some bank examiners have pressured banks to cease business with politically sensitive clients despite no safety risks [5]. Regulatory Actions - The FDIC has recently inquired with large banks about whether they have closed accounts or denied services based on political or religious grounds [6]. - An executive order signed by the president in August aims to eliminate unlawful debanking practices and requires regulators to identify financial institutions that have engaged in such actions [7].