White House readies order to fine banks for dropping clients over politics: WSJ

[WASHINGTON] The White House is drafting an executive order that would impose penalties on banks for dropping customers for political reasons, the Wall Street Journal reported on Monday (Aug 4).

Citing a draft of the order, the Journal said regulators would be instructed to investigate whether any financial institutions breach the Equal Credit Opportunity Act, antitrust laws or consumer financial protection laws.

The order, which could be signed as early as this week, would authorise monetary penalties, consent decrees or other disciplinary measures against violators, the Journal reported.

It also calls on regulators to strike policies they have that might have contributed to banks dropping certain customers, and requires the Small Business Administration to review the practices of banks that guarantee the agency’s loans, according to the report.

The White House declined to comment on the report when contacted by Reuters.

US President Donald Trump in January said the chief executive officers of JPMorgan Chase and Bank of America did not provide banking services to conservatives. The two banks denied making banking decisions based on politics.

The criticism of Wall Street banks followed accusations from congressional Republicans and Republican-led states, who claimed the institutions were engaging in “woke capitalism” and unfairly cutting ties with gun manufacturers, fossil fuel companies and other businesses perceived to be aligned with the political right.

The Trump administration is pursuing a broad reform agenda aimed at modifying rules governing financial institutions, including capital requirements, arguing that such action will boost economic growth and unleash innovation. REUTERS