Trump is Right to Push Bureaucrats Out of Banking & End Regulatory Overreach, Pat Toomey Writes in Washington Times

“It is vital that regulators evaluate objective, quantifiable banking metrics”

In case you missed it, former U.S. Senator Pat Toomey argues in a Washington Times op-ed that President Trump is correct in his executive order to remove bureaucrats out of banking decisions and allow financial institutions to make their own business choices — while underscoring the need to enact fair access legislation for all Americans.

He begins by noting that “under past administrations, politically directed bureaucrats compromised — even choked off — fair access to our banking system under the pretense of managing banks’ ‘reputation risk.’”

How did we get here? Toomey notes that “Banking regulators have enormous powers over the banks they supervise — too much.” The Obama and Biden Administrations carried out what is known as “Operation Chokepoint” where legal industries were pushed out of and denied banking access due to political affiliations.

With this, Toomey states: “Through Operation Choke Point 1.0, they wrongly instructed financial regulators to pressure banks to ‘debank’ those disfavored industries. The Biden Administration focused its unlawful discrimination against the cryptocurrency sector with Operation Choke Point 2.0.”

Toomey points to and applauds the Trump Administration’s executive order banning reputation risk as a supervisory metric and pushing for fair banking access while also warning that “we must be careful not to overshoot the solution. Toomey argues that:

• Executive orders lack permeance: Congressional action is needed to end politically motivated “debanking” once-and-for-all, regardless of who holds power.
• Banks should maintain their ability to conduct business and manage their reputations: While “reputation risk” is abused by regulators, banks should still have the ability to manage their reputations and make risk-based business decisions.
• Washington shouldn’t pick winners and losers: Toomey argues that current vague rules give regulators in Washington far too much power to quietly decide which lawful businesses and Americans get access to basic banking — and which are shut out — based on politics, not facts.

Senator Toomey concludes his piece by saying, “As policymakers consider next steps, they must ensure that reforms strike the right balance: ending politically motivated, government-driven debanking while preserving banks’ ability to manage their own reputation risk responsibly.”

Read Sen. Toomey’s full piece in The Washington Times HERE.