Debanking is when a bank, payment processor, or other financial institution closes an account, denies service, or cuts off an entire class of customers based on category-level judgments about risk, reputation, or values rather than an individualized look at whether a specific customer has actually done anything wrong. The U.S. Treasury Department uses the closely related term “de-risking” to describe the same behavior: terminating or restricting a relationship “rather than manage risk associated with that relationship consistent with risk-based supervisory or regulatory requirements.”1U.S. Department of the Treasury. De-Risking Report Over the past two years it has become the subject of a presidential executive order, new federal banking rules, state legislation, and pending bills in Congress.
How Debanking Differs From a Routine Account Closure
A bank closing one account because that specific customer bounced checks, violated the terms of service, or triggered a concrete fraud alert is ordinary risk management. Debanking is the categorical version: an institution decides that a whole industry, viewpoint, or customer profile is not worth serving and closes or refuses accounts without weighing whether any individual customer poses a real problem. Banks typically point to profitability, the cost of anti-money-laundering compliance, regulatory uncertainty, and reputational exposure to explain these decisions.1U.S. Department of the Treasury. De-Risking Report
The distinction matters because federal confidentiality laws generally prevent a bank from telling you why your account is being closed. Customers often learn only that they have a set number of days to move their money.
Who Gets Debanked
The customers most commonly affected fall into a handful of recognizable groups.
Money services businesses, especially small and mid-sized remittance providers serving immigrant communities, have long faced closures because banks classify them as high-risk for money laundering. Nonprofits operating in high-risk jurisdictions abroad and foreign banks with low correspondent volumes face similar treatment.2Global Center on Cooperative Security. Understanding Bank De-Risking and Its Effects on Financial Inclusion
The list has since widened. A December 2025 supervisory review by the Office of the Comptroller of the Currency examined the nine largest national banks (JPMorgan Chase, Bank of America, Citibank, Wells Fargo, U.S. Bank, Capital One, PNC Bank, TD Bank, and BMO Bank) and found that between 2020 and 2023 all nine maintained policies restricting access based on the institution’s “values” rather than financial risk. Affected sectors named in the OCC’s findings included oil and gas exploration, coal mining, firearms manufacturing and distribution, private prisons, payday lending, tobacco and e-cigarette manufacturing, adult entertainment, political action committees and political parties, and digital assets.3OCC. OCC Preliminary Findings Report Some banks also applied heightened review to individual customers based on negative media coverage or participation in community demonstrations.
Cryptocurrency companies were hit particularly hard. A House Financial Services Committee report identified at least 30 digital asset entities and individuals cut off from banking as a result of coordinated regulatory pressure critics dubbed “Operation Choke Point 2.0.”4U.S. House Financial Services Committee. Debanking Report Some companies reported being unable to pay basic operating expenses.
Cannabis businesses face a different problem. Marijuana is legal for medical use in 40 states and recreational use in 24, but remains a controlled substance under federal law, so banks serving these customers risk federal sanctions and must file Suspicious Activity Reports on every relationship.5ICBA. Banking Cannabis-Related Businesses Many banks refuse to take on the compliance load at all, pushing large parts of the industry into cash. The SAFER Banking Act passed the Senate Banking Committee on a bipartisan basis in September 2023 but has not become law. The Justice Department moved FDA-approved marijuana products and state-licensed medical marijuana to Schedule III in April 2026, which changes some tax treatment under Internal Revenue Code Section 280E but does not resolve the banking access problem.6U.S. Department of the Treasury. Treasury Press Release on Marijuana Rescheduling
Why Banks Do It: The Reputation Risk Machine
The engine behind most debanking has been a supervisory concept called “reputation risk.” For years, bank examiners could criticize an institution for serving customers whose businesses might attract negative publicity, even if those customers presented no measurable financial or operational danger. Faced with that pressure, banks preemptively closed accounts to avoid regulatory friction.
The cryptocurrency squeeze illustrated how the mechanics worked. The FDIC sent “pause” letters directing banks to halt crypto-related activities. When the agency released 175 documents through FOIA requests in February 2025, Acting Chairman Travis Hill acknowledged that bank requests to engage in crypto or blockchain activities had been “almost universally met with resistance,” including repeated demands for additional information, months of silence, and direct instructions to pause or suspend related activity.7FDIC. FDIC Releases Documents Related to Supervision of Crypto-Related Activities Hill said the cumulative effect was to make progress “extraordinarily difficult—if not impossible.” The Federal Reserve required supervised banks to notify supervisors before engaging in digital asset activities; the OCC required a “non-objection letter” before offering crypto services; and a January 2023 joint statement from the three agencies, while officially saying banks were “neither prohibited nor discouraged” from serving the sector, created enough ambiguity to chill participation.8Banking Dive. FDIC Letters Fuel Crypto’s Operation Chokepoint 2.0 Claims
A January 2026 Cato Institute analysis of more than 8,300 CFPB debanking complaints argued that the dominant driver is not political animus by banks but government and supervisory pressure combined with anti-money-laundering rules. The study found only 35 complaints that explicitly referenced politics or religion.9American Banker. 10Cato Institute. Understanding Debanking
The Federal Response
The 2025 Executive Order
On August 7, 2025, President Trump signed an executive order titled “Guaranteeing Fair Banking for All Americans.” It establishes a federal policy that banking decisions must rest on “individualized, objective, and risk-based analyses” and defines “politicized or unlawful debanking” as restricting access to financial services based on a customer’s political or religious beliefs or lawful business activities that the provider disfavors for political reasons.11The White House. Guaranteeing Fair Banking for All Americans
The order set several deadlines. Within 60 days, the Small Business Administration was to notify SBA-guaranteed lenders of the new requirements. Within 120 days, regulators were directed to identify institutions with policies encouraging politicized debanking and pursue remedial actions including fines and consent decrees. Within 180 days, regulators had to remove “reputation risk” from guidance documents, manuals, and examination materials. The Treasury Secretary was tasked with a comprehensive anti-debanking strategy by February 2026.
Enforcement relies on existing statutes: the Equal Credit Opportunity Act, Section 5 of the Federal Trade Commission Act, and Section 1031 of the Dodd-Frank Act. The ECOA does not explicitly protect political or social views, and the FTC Act prohibits unfair practices without addressing discrimination as such. The order also does not excuse institutions from complying with the Bank Secrecy Act or anti-money-laundering rules.12Consumer Financial Protection Bureau. CFPB Finalizes Rule on Federal Oversight of Popular Digital Payment Apps
The Reputation Risk Rule
On October 30, 2025, the OCC and FDIC jointly proposed a rule prohibiting regulators from taking adverse action against banks based on reputation risk.3OCC. OCC Preliminary Findings Report The Federal Reserve followed in February 2026 with its own version.13Federal Reserve. Federal Reserve Board Requests Comment on Proposal
The OCC and FDIC finalized their rule on April 7, 2026, with an effective date of June 9, 2026. It prohibits regulators from criticizing or taking adverse action against a bank based on reputation risk, and bars them from encouraging or requiring institutions to close accounts based on a customer’s political, social, cultural, or religious views, constitutionally protected speech, or involvement in lawful but “politically disfavored” business activities.14Federal Register. Prohibition on the Use of Reputation Risk by Regulators Reputation risk is defined as any risk that an institution’s actions could negatively affect public perception “for reasons not clearly and directly related to the financial or operational condition of the institution.” Regulators may still address traditional credit, market, and operational risk, provided those categories are not being used as a pretext.15FDIC. Agencies Issue Final Rule to Prohibit Use of Reputation Risk The Federal Reserve’s parallel proposal remains in rulemaking after its comment period closed in April 2026.16Federal Register. Prohibition on Use of Reputation Risk
OCC Follow-Through
The OCC’s December 2025 findings against the nine largest banks came with teeth. Comptroller Jonathan Gould said the agency intends to “hold banks accountable for these actions” and will weigh a bank’s debanking record when reviewing licensing filings and Community Reinvestment Act ratings.17Banking Dive. OCC Debanking Report The OCC said it is still reviewing thousands of complaints for further instances of political and religious debanking.
Congressional Legislation
Two bills in the 119th Congress would put anti-debanking rules into statute.
The Fair Access to Banking Act (S. 401) would require financial institutions to conduct impartial, individualized, risk-based analyses. It was introduced on February 4, 2025, referred to the Senate Banking Committee, and has not advanced further as of mid-2026.18Congress.gov. S.401 – Fair Access to Banking Act
The Financial Integrity and Regulation Management (FIRM) Act (S. 875), sponsored by Senate Banking Committee Chairman Tim Scott, would permanently remove “reputational risk” from safety and soundness evaluations and bar federal agencies from using the concept to justify politically motivated actions. It was reported favorably out of committee on March 13, 2025, with 12 cosponsors and placed on the Senate calendar, but has not received a full Senate vote.19Congress.gov. S.875 – FIRM Act
State Fair Access Laws
Three states have enacted anti-debanking laws with real enforcement mechanisms.
Florida acted first in 2023, prohibiting financial institutions from discriminating against customers based on political or religious factors, and expanded the law in 2024 to cover federally chartered institutions doing business in the state. Florida requires annual compliance attestations and channels enforcement through state prosecutors after a regulatory complaint process. There is no private right of action for consumers.20Bradley Arant Boult Cummings. State Laws Show Uniformity Is Key to Truly Fair Bank Access
Tennessee’s law took effect in 2024, and Idaho’s on July 1, 2025. Both apply to financial institutions with more than $100 billion in assets, and both let consumers sue institutions directly in addition to enforcement by the state attorney general. Idaho’s law extends to payment processors handling $100 billion or more in annual transactions and specifically bars discrimination based on refusal to adopt greenhouse gas targets, diversity audits, or participation in fossil fuel and firearm industries.
The state laws draw heavily on model legislation developed by the Alliance Defending Freedom, which prohibits institutions from canceling accounts based on constitutionally protected political or religious views, speech, or affiliations.21ADF Legal. Idaho Governor Signs ADF Model Bill Iowa, Oklahoma, and Georgia have introduced similar bills. Comparable legislation has failed in Arizona, Indiana, Louisiana, and other states.
Where Debanking Is Still Expanding
Even as regulators pull back on reputation risk, other fronts are opening.
Payment processors and card networks have joined the enforcement picture. On March 26, 2026, FTC Chairman Andrew Ferguson issued warning letters to four nonbank financial infrastructure platforms, including two card networks and two payment processors (Stripe was identified as one recipient), cautioning that denying payment services based on political or religious views may violate Section 5 of the FTC Act. The FTC warned that card networks could face enforcement if they “turn a blind eye” to member institutions engaged in prohibited debanking.22Holland & Knight. FTC Issues Debanking Warning Letters to Payment Industry
Immigrants are facing pressure in the opposite direction. A May 2026 executive order titled “Restoring Integrity to America’s Financial System” directed regulators to tighten customer due diligence rules based on immigration status. A June 2026 FinCEN advisory instructed financial institutions to treat the use of Individual Taxpayer Identification Numbers or foreign passports, in combination with other factors, as risk indicators for Suspicious Activity Reports.23Charity & Security Network. Trump’s Executive Order Targets Customer Identification, Cross-Border Transfers, and Financial Access The National Consumer Law Center warned the order would “radically destabilize the U.S. financial system and force debanking on an unprecedented scale” by cutting off checking accounts, mortgages, and credit cards for millions of immigrants.24National Consumer Law Center. Executive Order Will Cut Off Financial Services to Millions of Immigrants Nonprofits serving refugee, immigrant, and humanitarian communities face heightened scrutiny of cross-border payments and donor documentation, which the Charity and Security Network described as “category-wide suspicion” at odds with standard risk-based frameworks.
The Consumer Financial Protection Bureau, which had previously used its supervisory and enforcement authority to address debanking, has seen its role diminish. Treasury Secretary and Acting CFPB Director Scott Bessent halted CFPB rulemaking, enforcement investigations, and litigation against financial institutions, a freeze observers have noted conflicts with the administration’s stated anti-debanking goals.25Senate Banking Committee. Debanking Complaints Analysis
If It Happens to You
Federal confidentiality laws generally prevent a bank from telling you why an account was closed, so the practical first step is documenting what you were told and when. The CFPB’s complaint database is still the main federal channel, and it captures the scale of the problem: over a recent three-year period the bureau logged 8,056 complaints about improper account closures and 3,899 about being unable to open accounts. The four largest banks accounted for more than half. JPMorgan Chase drew 1,423 closure complaints and 443 denial complaints; Wells Fargo 1,053 and 350; Bank of America 988 and 584; and Citigroup 742 and 96. Fintechs generated significant volume as well, with Chime Financial accounting for 451 closure complaints and PayPal, Venmo, and Block (CashApp/Square) contributing hundreds more.25Senate Banking Committee. Debanking Complaints Analysis
If you live in Florida, Tennessee, or Idaho, your state law provides an additional channel. Florida routes complaints through state regulators and prosecutors. Tennessee and Idaho let consumers sue large institutions directly. And for accounts at national banks, the OCC’s ongoing supervisory work now treats a bank’s debanking record as a factor in licensing and CRA evaluations, giving customer complaints more weight than they carried a year ago.