ICYMI: AFFM Joins U.S. Privacy and Civil Liberties Oversight Board Panel to Discuss Fair Access to Banking

“Financial oversight was used to advance ideological or political agendas aimed at dismantling industries that regulators and supervisory policymakers may have opposed.”

In case you missed it, last week, Americans for Free Markets (AFFM) Executive Director David Ibsen joined the U.S. Privacy and Civil Liberties Oversight Board for a panel on politically-motivated, appearing alongside leading industry voices to examine the roots of the issue, its widespread consequences and the path forward to ensure fair access to banking for all Americans.

Highlights from the discussion include:

The Root Causes of Debanking

Ibsen explained that the root cause of debanking stemmed from the “supercharged” regulatory frameworks of “Know Your Customer procedures and the anti-money laundering laws, stemming from the Bank Secrecy Act of 1970.” He highlighted that the “phenomenon of debanking, or government-driven debanking, which occurs when the financial institutions close accounts because regulators or policymakers may deem an industry, belief system, or ideology to be undesirable at the time or because of overly broad compliance rules, such as anti-money laundering requirements, which can sweep in otherwise lawful customers.”

Financial Oversight as Politicized Weaponization

“Financial oversight was used to advance ideological or political agendas aimed at dismantling industries that regulators and supervisory policymakers may have opposed and inserting ideology into what should be neutral financial supervision.”

President Trump Takes Key Steps in the Right Direction

“The Trump Administration’s executive order from August of this year prohibits the use of reputational risk in  bank supervision and directs the Treasury to modernize outdated rules that fuel unnecessary account closures and ensures that regulators will follow objective, reasonable, and apolitical assessments going forward.”

The Importance of a National Fair Access Standard

“I think a national fair access standard going forward that prohibits banks from closing accounts based on political and religious views would help address the undue influence of federal regulators in the future.”

Sustained Congressional Action and Long-Term Reforms to Support the President

Congress can support the president and provide clarity by advancing legislation like the “Streamlining Transaction Reporting and Ensuring Anti-Money Laundering Improvements for a New Era” (STREAMLINE) Act. This bill was highlighted by Ibsen during the panel, noting that it “would be a lasting solution so that regulation doesn’t slingshot back and forth based on political ideology or who’s in political power, while letting banks remain free to run their businesses, use their expertise to evaluate risk like other businesses, and cooperate with law enforcement in a very effective manner that stops high-risk illegal activity without ensnaring law-abiding Americans.” Ibsen also highlighted recent positive proposals to raise the minimum suspicious activity report (SARs) and currency transaction report (CTRs) thresholds, and encouraged reform of Bank Secrecy Act confidentiality laws to enable banks to communicate more openly with customers.

Read more from the U.S. Privacy and Civil Liberties Oversight Board on the panel here.