Debanking is when a bank or other financial institution closes a customer’s accounts or refuses to open one, often suddenly and without a stated reason. Under current federal law, banks generally are not required to explain the decision, and when the closure is linked to a suspicious activity report filed under the Bank Secrecy Act, the bank is actually prohibited from telling the customer that a report was filed. The practice has affected cryptocurrency companies, firearms dealers, religious organizations, adult entertainment workers, oil and gas firms, and political figures, and it is now the subject of a 2025 executive order, new federal rulemaking, and lawsuits seeking billions in damages.
Why Banks Close Accounts
A January 2026 Cato Institute policy analysis by Nicholas Anthony sorted the reasons banks drop customers into four buckets: governmental, operational, political, and religious. The most significant driver, according to the analysis, is governmental pressure. Compliance with the Bank Secrecy Act and anti-money-laundering rules makes some customer relationships economically unfeasible or legally risky, so banks exit them. Operational closures cover ordinary business decisions such as contract violations, unprofitability, or a bank leaving a market entirely.
Political and religious debanking generate the loudest headlines but are harder to pin down in the data. The Cato analysis reviewed more than 8,300 consumer complaints filed with the Consumer Financial Protection Bureau since 2012 and found that only 35 explicitly mentioned politics or religion. The report concluded that ideologically driven closures appear “almost nonexistent” in the complaint record, while acknowledging that individual high-profile cases have drawn heavy attention.
Regulators looking at bank policies rather than complaints found something different. An Office of the Comptroller of the Currency review of the nine largest national banks concluded that between 2020 and 2023, all nine kept written policies restricting access for specific sectors based on reputational concerns rather than financial risk. Some banks placed restrictions on customers in sectors that engaged in “activities that, while not illegal, are contrary to [the bank’s] values.”
Who Gets Debanked
The list of affected customers is broad. The OCC’s review identified restrictions applied to oil and gas exploration, coal mining, firearms, private prisons, tobacco and e-cigarette manufacturers, adult entertainment, payday lending, political action committees, and digital assets. Several banks also subjected individual customers to heightened scrutiny based on “negative media” coverage or involvement in labor disputes and community demonstrations.
The cryptocurrency industry has been the most vocal. A November 2025 House Financial Services Committee report titled “Operation Choke Point 2.0: Biden’s Debanking of Digital Assets” identified at least 30 digital asset entities or individuals who lost banking access, and it accused the Federal Reserve, FDIC, OCC, and SEC of a coordinated effort to push crypto firms out of the banking system without formal rules. Uniswap Labs CEO Hayden Adams said JPMorgan Chase closed his company’s accounts in 2022 “with no notice or explanation.” Blockdaemon’s CEO said Bank of America shut down the firm’s account without detailed explanation during Silicon Valley Bank’s 2023 collapse. Crypto startup Eco lost its payroll provider when Bill.com canceled its account citing a “new policy.” On the Joe Rogan podcast in November 2024, venture capitalist Marc Andreessen said he knew of 30 tech founders who had been debanked.
Religious organizations have reported similar experiences. The National Committee for Religious Freedom, led by former Kansas Governor Sam Brownback, alleged that JPMorgan Chase closed its account on religious grounds. A 2023 report by the Institute for Social Policy and Understanding found that 27% of Muslim Americans had experienced difficulties with financial institutions, more than double the rate for the general public, with business accounts investigated, personal accounts suspended, or transactions flagged because a keyword served as a “red flag.” The report attributed much of this pattern to the overlap between Muslim-associated names, international transactions, and the automated screening systems banks use to comply with anti-terrorism financing laws.
Adult entertainment workers have faced parallel problems: the Free Speech Coalition found that 63% of adult workers had lost access to a bank account because of their profession. And after the January 6, 2021 Capitol attack, multiple banks severed ties with Trump-affiliated entities, producing lawsuits now moving through federal court.
Operation Choke Point and Its Sequel
The current debate traces back to Operation Choke Point, a 2013 initiative run through the Department of Justice’s Financial Fraud Enforcement Task Force with participation from the FDIC, OCC, and other agencies. The program pressured banks to scrutinize and cut ties with industries regulators considered high-risk for consumer fraud, including gun stores, ammunition sellers, pawn shops, payday lenders, tobacco retailers, and online gambling operations. Internal emails later revealed that some regulators had targeted industries they personally considered “unsavory,” and bank examiners reportedly warned institutions of “unplanned audits” if they continued serving those clients.
The DOJ confirmed the program’s end in an August 2017 letter to the House Judiciary Committee, and in 2019 the FDIC settled a related lawsuit and committed to stop issuing informal guidance about which industries banks should avoid. Critics contend that a similar approach resurfaced under the Biden administration aimed at cryptocurrency. In February 2025, after a Freedom of Information Act lawsuit, the FDIC published 175 documents showing its approach to banks seeking to engage with crypto. Acting Chairman Travis Hill said bank requests had been “almost universally met with resistance,” including repeated information demands, months-long silences, and directives to “pause, suspend, or refrain from expanding” crypto-related activity. Hill said the approach created a “general perception that the agency was closed for business” regarding blockchain technology.
The 2025 Executive Order
On August 7, 2025, President Trump signed an executive order titled “Guaranteeing Fair Banking for All Americans.” The order defines “politicized or unlawful debanking” as any action by a financial institution to restrict or modify banking services based on a customer’s political or religious beliefs, or based on lawful business activities that the institution “disagrees with or disfavors for political reasons.”
The order imposed deadlines on federal regulators:
- Within 60 days, the Small Business Administration must notify participating lenders of their obligation to identify and reinstate clients previously denied service through politicized debanking.
- Within 120 days, federal banking regulators must identify institutions with past or current policies encouraging politicized debanking and take remedial action, which can include fines, consent decrees, or other disciplinary measures.
- Within 180 days, regulators must remove “reputation risk” from all guidance documents, manuals, and examination materials. The Treasury Secretary must develop a strategy to combat debanking across the federal government, and regulators must review complaint data for evidence of religious discrimination and refer non-compliant institutions to the Attorney General for civil action.
The order also required SBA-jurisdiction institutions to conduct a backward-looking review to identify and attempt to reinstate customers previously denied service. The cited enforcement authorities include the Federal Trade Commission Act, the Consumer Financial Protection Act, and the Equal Credit Opportunity Act. A legal analysis noted that the order does not create new legal grounds for action but rather directs more aggressive enforcement of existing statutes, and it does not exempt institutions from ongoing Bank Secrecy Act or USA PATRIOT Act obligations.
Removing Reputation Risk From Bank Supervision
For over a decade, “reputation risk” sat inside formal supervisory frameworks, giving examiners a way to pressure banks to drop clients by warning that serving a particular industry or customer could harm the bank’s public image. In September 2025, the OCC began dismantling that framework. Acting Comptroller Jonathan V. Gould announced that the agency had removed references to reputation risk from its handbooks and launched a review of the nine largest national banks for evidence of politicized debanking. The OCC issued two bulletins, one clarifying that a bank’s debanking policies would now be considered in licensing decisions and Community Reinvestment Act ratings, and another reminding banks of the narrow circumstances under which customer financial records can be disclosed.
In October 2025, the OCC and FDIC jointly proposed a rule to formally prohibit examiners from criticizing or penalizing banks based on reputation risk. That rule became final on April 7, 2026, with an effective date of June 9, 2026. It prohibits the agencies from requiring, instructing, or encouraging banks to close accounts or modify business relationships based on a customer’s political, social, cultural, or religious views, constitutionally protected speech, or “politically disfavored but lawful business activities.” It also bars any supervisory action designed to punish banks for serving such customers. The FDIC simultaneously scrubbed references to reputation risk from its Risk Management Manual, Application Procedures Manual, Trust Examination Manual, and other internal documents.
State Laws Already on the Books
Several states moved ahead of the federal government, producing a patchwork of “fair access to banking” laws.
Florida was first. HB 3 took effect July 1, 2023, and HB 989 expanded the law effective May 2, 2024. The expanded law requires financial institution officers to annually attest under penalty of perjury that they comply with the anti-debanking provisions and created a formal complaint process through the Florida Office of Financial Regulation. The Florida Bankers Association challenged proposed rule amendments, with a hearing set for March 2026.
Tennessee passed HB 2100 in April 2024, applying to banks and insurers with more than $100 billion in assets. Rather than creating a state complaint process, Tennessee gave customers the right to request a written statement explaining the specific reasons for a service refusal or termination within 90 days of notification.
Idaho enacted SB 1027, the Transparency in Financial Services Act, effective July 1, 2025. The law targets banks with over $100 billion in assets and payment processors handling similar transaction volumes. It prohibits discrimination based on a “social credit score,” defined broadly to cover evaluations based on religious exercise, speech, association, refusal to adopt greenhouse gas emissions targets, refusal to conduct diversity audits, and participation in the fossil fuel or firearms industries. Institutions must provide a detailed written explanation of a service denial within 14 days of a customer request, and violations are enforceable under Idaho’s Consumer Protection Act.
In October 2025, Senator Thom Tillis introduced a discussion draft of the “Ensuring Fair Access to Banking Act” to establish a uniform federal standard replacing the state-by-state approach. In the House, Representative Andy Barr sponsored H.R. 987, the “Fair Access to Banking Act,” which would bar financial institutions that deny fair access from using taxpayer-funded discount window lending programs. That bill had 94 Republican cosponsors as of mid-2026 but had not advanced beyond committee.
The Lawsuits Testing These Rules
In January 2026, the Trump Organization and related entities filed a $5 billion lawsuit against JPMorgan Chase and CEO Jamie Dimon in Miami-Dade County, Florida, alleging the bank closed accounts in early 2021 for “political and social motivations” and placed the plaintiffs on a “blacklist.” The complaint asserted claims including trade libel, breach of implied covenant of good faith, and violations of Florida’s Unfair and Deceptive Trade Practices Act. JPMorgan Chase called the suit meritless and said it closes accounts based on legal or regulatory risk, not political reasons. The bank, represented by a Jones Day team that includes former U.S. Solicitor General Noel Francisco, removed the case to the U.S. District Court for the Southern District of Florida and moved for dismissal, calling the lawsuit “woefully inadequate.”
In a separate case, the Trump family sued Capital One in March 2025, alleging the bank closed approximately 300 Trump-linked accounts for political reasons following January 6. In March 2026, Judge Roy Altman dismissed the complaint as “deficient” and lacking specifics, though he found the plaintiffs had done “just enough” to allege the debanking was political. He granted leave to refile by July 2, 2026. Capital One, JPMorgan Chase, and Bank of America have all included warnings in their SEC filings about the regulatory reviews and fair-access demands stemming from the executive order.
The Unresolved Conflict With Anti-Money-Laundering Law
The core difficulty with anti-debanking policy is that it collides with the regulations that have historically driven account closures. The Bank Secrecy Act and its implementing rules require banks to monitor transactions, file suspicious activity reports, conduct customer due diligence, and exit relationships that pose money laundering or terrorism financing risks. Banks that fail face severe penalties. Those obligations create powerful incentives to drop any customer whose transactions look complicated or whose industry attracts regulatory scrutiny.
The August 2025 executive order did not resolve this tension. It directed banks to stop closing accounts for political or religious reasons while saying nothing about how to harmonize that mandate with ongoing BSA and anti-money-laundering obligations. One analysis noted that institutions now risk sanctions for closing accounts that regulators might later deem “unlawful,” even when those same closures were originally prompted by regulatory encouragement or legitimate risk management. Adding to the confusion, 50 state attorneys general simultaneously asked the DOJ to use the financial system to “cut off” access for illegal offshore gaming platforms, reinforcing the expectation that banks should aggressively screen customers.
OCC Comptroller Jonathan V. Gould said the agency “will not tolerate the misuse of customer financial records as a political tool” and signaled that the OCC intends to work with other federal agencies on systemic issues within the BSA and anti-money-laundering framework. For now, the practical guidance is meticulous documentation: institutions are advised to support every account closure decision with a written rationale demonstrating it was based on legitimate risk management rather than prohibited factors.
If Your Account Has Been Closed
The rules protecting a debanked customer depend on where you live and what kind of institution closed your account. Under the final federal rule effective June 9, 2026, the OCC and FDIC cannot pressure banks to close your account based on your political, social, cultural, or religious views or on lawful but politically disfavored business activities. Under the August 2025 executive order, SBA-participating lenders were required to review past denials and attempt to reinstate customers who had been cut off for those reasons.
State law can give you a direct right to an explanation. In Tennessee, if a covered bank or insurer refuses or terminates service, you can request a written statement of the specific reasons within 90 days of notification. In Idaho, a covered bank or large payment processor must provide a detailed written explanation of a denial within 14 days of your request, with enforcement available under the state’s Consumer Protection Act. In Florida, you can file a complaint through the Office of Financial Regulation.
One boundary is worth keeping in mind. None of these protections override the Bank Secrecy Act. If a closure was tied to a suspicious activity report, the bank is legally forbidden from telling you so, and neither the executive order nor the new federal rule changed that.