Fed report faults Bank of America, Wells Fargo and others over divisive ‘debanking’
Federal banking regulators released preliminary findings Wednesday of a review of big bank practices, and stated that nine of the nation’s largest banks engaged in discriminatory “debanking” practices.
Charlotte-based Bank of America, and California’s Wells Fargo, with its largest employment base in Charlotte, were on that list, along with JPMorgan Chase Bank, Citibank, U.S. Bank, Capital One, PNC Bank, TD Bank, and BMO Bank.
“Debanking” refers to the practice of banks closing or restricting access to financial services for certain individuals or entities, often based on assessments of risk to the bank’s reputation, according to the Office of the Comptroller of the Currency.
It’s also a high-profile political issue. President Donald Trump has cited personal grievances against major banks as he and other Republicans claimed banks discriminated against them due to their political beliefs.
The OCC’s preliminary review identified times where banks imposed restrictions on sectors engaged in “activities that, while not illegal, are contrary to (the bank’s) values.”
However, the report also drew criticism from some industry experts like Nicholas Anthony, a policy analyst at the nonpartisan, Libertarian-leaning research group Cato Institute.
The OCC’s findings “fall short,” he said, and are incomplete because they “failed to mention some of the most well-known causes of debanking.”
Yongqiang Chu, professor of real estate and urban economics at UNC Charlotte, also disagrees with the OCC’s preliminary findings. “Fair doesn’t mean banks must lend for industries equally, because different industries have different risks,” Chu said.
OCC review follows Trump executive order
The supervisory review was prompted by Trump, who signed an executive order in August In his order, Trump said banks can no longer consider the risk to their reputations when deciding whether to do business with someone.
Days before signing the order, Trump accused Bank of America and JPMorgan Chase of rejecting his business after his first presidential term ended in the wake of the Jan. 6, 2021, Capitol riot by his supporters. Trump claimed Bank of America discriminated against when he had "a billion plus" to deposit.
Bank of America denied Trump’s accusations, stating that political beliefs are not a factor in account closure decisions. Bank of America CEO Brian Moynihan, responded to Trump's comments by saying, "We bank everybody." JPMorgan Chase also refuted the claims.
Bank of America did not respond to a request for comment about the OCC’s preliminary report. Wells Fargo declined to comment.
The OCC’s findings
Between 2020 and 2023, the nine banks maintained policies that restricted access to financial services or required “escalated reviews” for customers in certain industries, according to the OCC’s five-page preliminary findings.
Comptroller of the Currency Jonathan Gould condemned the banks’ actions for using their “government-granted charter and market power” for “harmful debanking policies.” Gould vowed the OCC “will hold banks accountable for these actions and ensure unlawful debanking does not continue.”
Gould was appointed as comptroller by Trump and confirmed by the Senate in July.
Sectors subjected to restricted debanking access listed by the OCC are:
- Oil and gas exploration. These restrictions were part of larger climate campaigns intended to advance the banks’ “environmental commitments.”
- Coal mining or coal-powered plants. Some banks said they would not provide financial services to companies deriving a percentage of their revenue from coal extraction, mining, or coal products. One bank said: “(T)here is a high level of protest, headline and mission-related reputation risk.”
- Firearms. Several banks restricted financing to firearms manufacturers or retailers, including those offering assault- or military-style weapons for civilian use. At least two banks highlighted “polarizing” or “polarized” public opinion surrounding individual gun ownership rights and gun control as part of the basis for their restrictions.
- Private prisons. Some banks listed business as “immigrant detention centers.” “Reputation risk” concerns included apparent “profiting from incarceration and immigrant detention.”
- Tobacco and e-cigarette manufacturers. One bank’s business line stated with respect to e-cigarettes, “The sector is receiving negative media coverage as well as activist attention resulting in reputation risk.”
- Adult entertainment. Banks either strictly restricted access to, or required escalated review for, services for customers engaged in the sale or distribution of adult media and non-media.
- Political campaigns. Several banks restricted lending and other financial services to individuals or entities for the benefit of a political candidate or parties in support of a campaign effort.
- Digital assets. Many institutions restricted banking digital asset activities often attributed to financial crime considerations.
- Payday lending and consumer debt collection. Banks cited “aggressive collection” practices and “disproportionate” effect on lower-income individuals, including auto title lenders and other businesses offering high-interest consumer loans.
The OCC did not identify which banks had those range of restrictions.
“Banking decisions should be based on individualized, objective, and risk-based analyses, not politics or ideology,” the OCC said in its findings.
Criticism of OCC’s findings
Banks limiting lending to certain industries are driven by value considerations and business risk concerns, Chu said. Stringent future requirements could significantly affect these companies’ operations, jeopardizing their ability to repay loans.
“These companies will face risks that other companies don’t face,” Chu said.
The report appears to blame banks for cutting ties with cryptocurrency companies, Anthony said, but does not mention that the Federal Deposit Insurance Corp. explicitly told banks to stay away from these companies.
The FDIC in 2022 listed crypto-related risks for safety and soundness, financial stability and consumer protection. In March, FDIC rescinded its guidance allowing FDIC-supervised institutions to engage in “permissible” crypto-related activities without receiving prior approval.
The OCC’s critique of banks for severing ties with controversial clients contradicts the fact that regulators assess banks on reputation. “Although the report may only be a preliminary review, it leaves much to be desired,” Anthony said.
Bank shareholders and depositors also are a consideration. “If you know your bank is financing things that really do not align with your values, you don’t want to put your money in that bank,” Chu said.
Support for OCC’s findings
The Bank Policy Institute, a nonpartisan, Libertarian-leaning advocacy group, also responded Wednesday, saying it is working with Congress and the administration “to ensure banks are able to serve law-abiding customers.”
“It’s in banks’ best interest to take deposits, lend to and support as many consumers and businesses as possible to drive economic growth,” BPI said.
BPI and other associations issued a set of standards called Fair Access Principles for policymakers. Among the principles, banks should be allowed to make their own risk- and business-based decisions while complying with regulations. The regulations also should provide clarity on disclosing reasons for account denial or closure, BPI said.
And, regulators should not require a bank to close an account solely based on reputation risk, according to BPI.
OCC review ongoing
The OCC is reviewing nearly 100,000 consumer complaints to identify instances of debanking based on political or religious beliefs, according to the agency. The supervisory review is ongoing to assess how bank policies were applied over the last five years.
The OCC and FDIC have proposed rulemaking to codify the elimination of reputation risk from their supervisory program.
This story was originally published December 11, 2025 at 5:17 AM.
