ICYMI: Congress and Regulatory Leaders Must Capitalize on President Trump’s Executive Order to End Government-Driven Debanking

“More action is needed from Congress and regulatory leaders to capitalize on the regulatory reform momentum and minimize the risk that a future administration resumes the abuse of its regulatory powers.”

In case you missed it, Americans for Free Markets (AFFM) Advisor and former U.S. Senator Pat Toomey (R-PA) penned an op-ed in The Hill commending the Trump Administration’s recent executive order (EO) and calling on Congress and regulatory leaders to end government-driven debanking. 

In his piece, Toomey provides the historical context of “reputational risk” and its abuse under the Obama and Biden administrations through Operations Chokepoint 1.0 and 2.0 to pressure banks to deny services to certain industries. Toomey then discusses the impact of President Trump’s EO:

“This new executive order has the potential to limit the abuse of power by regulators and hold them accountable, increase transparency for customers, update broken laws that have led to unintended account closures, and reinstate those wrongly “debanked.”

Toomey then states more action is needed to minimize the risk of future administrations abusing the financial regulatory system, as outlined in an America First Policy Institute (AFPI) report:

“Congress should codify the removal of “reputational risk” from regulators’ supervisory process by passing Senate Banking Chairman Tim Scott’s (R-S.C.) Financial Integrity and Regulation Management Act. A companion bill, introduced by Reps. Andy Barr (R-Ky.) and Ritchie Torres (D-N.Y.) has bipartisan support in the House of Representatives.”

Toomey also calls for regulators to develop a national fair access standard:

“Regulators should develop a national fair access standard that would forbid banks from denying services to people or businesses on the basis of the political affiliation or political views of those people or business owners. A national fair access standard would provide uniform national guidelines to banks and prevent an unworkable patchwork of state debanking laws.”

Lastly, Toomey details the importance of modernizing outdated policies that have contributed to government-driven debanking:

“Finally, it is long past time for Congress to modernize the half-century-old Anti Money Laundering and Know Your Customer regulations that originated with the Bank Secrecy Act of 1970. These outdated and sometimes even obsolete laws require the filing of massive volumes of reports by financial institutions to regulators — a staggering majority of which are never even looked at or followed up on by the federal institutions requiring them.”

To read Sen. Toomey’s full op-ed in The Hill, click HERE.