Debanking Debunked By Erin Busse, JD, Vice President and Deputy General Counsel, Compliance Alliance On Aug. 7, 2025, the Trump administration issued the “Guaranteeing Fair Banking for All Americans” Executive Order (“the Order”). The EO asserts that certain Americans have faced discrimination in banking due to their “political affiliation, religious beliefs or lawful business activity.” The Order further states that these practices are prohibited under the Equal Credit Opportunity Act (ECOA) and constitute “politicized or unlawful debanking,” which must be addressed. The language of the Order has already sparked debate among regulators and lenders about how far its reach extends. To grasp the rule’s scope, financial institutions must understand the meaning of “politicized or unlawful debanking.” The Order defines the term as: “[…] an act by a bank, savings association, credit union, or other financial services provider to directly or indirectly adversely restrict access to, or adversely modify the conditions of, accounts, loans, or other banking products or financial services of any customer or potential customer on the basis of the customer’s or potential customer’s political or religious beliefs, or on the basis of the customer’s or potential customer’s lawful business activities that the financial service provider disagrees with or disfavors for political reasons.” In combating debanking, the Order places the burden on the regulators. This refers to all “Federal member agencies of the Financial Stability Oversight Council.” The Council includes most financial regulators, namely, the Office of the Comptroller of the Currency (OCC), the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC), the Consumer Financial Protection Bureau (CFPB) and the Department Colorado Banker 12
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