U.S. President Donald Trump is reportedly preparing to issue an executive order that would compel federal banking regulators to investigate allegations of “debanking” — particularly those raised by the cryptocurrency industry and conservative political groups.
According to a draft seen by The Wall Street Journal, the directive would task regulators with examining whether financial institutions have breached laws related to fair lending, consumer protection, or antitrust practices. Entities found in violation could face penalties or legal consequences. While the order could be signed as early as this week, timing remains uncertain and could be subject to change.
Scrutiny of Past Regulatory Actions
The move appears to be a direct response to long-standing complaints from crypto firms, which claim the Biden administration systematically pressured banks to distance themselves from digital asset businesses. Executives within the sector argue that regulatory agencies discouraged banks from engaging with crypto clients, effectively cutting them off from the financial system.
The upcoming order reportedly demands that regulators identify and repeal any guidance or policies that may have led banks to close accounts or deny services, particularly to crypto-related clients. In addition, the Small Business Administration (SBA) will be instructed to review its loan programs and the banking relationships involved in guaranteeing those loans.
Some cases identified during these reviews may be escalated to the Department of Justice for further legal evaluation, the draft notes.
“Operation Choke Point 2.0”
The initiative echoes concerns raised in the industry about what has been dubbed “Operation Choke Point 2.0” — a reference to an earlier Obama-era program that targeted high-risk industries such as payday lenders through indirect pressure on banks.
Crypto figures say the more recent iteration began after the collapse of FTX in late 2022. Coinbase’s chief legal officer Paul Grewal testified earlier this year that banking regulators under the Biden administration, including the FDIC, subjected banks to intense scrutiny around their dealings with crypto and stablecoins. According to Grewal, this pressure campaign led some banks to abandon crypto clients entirely.
A Freedom of Information Act lawsuit filed by Coinbase further revealed communications showing the FDIC encouraged certain institutions to halt crypto-related services — reinforcing industry claims that their exclusion from banking was driven by government influence.
Political Angle Also Under Review
The executive order is expected to also address alleged political bias in banking services. Conservative groups have raised alarms that some financial institutions are closing or denying accounts based on political ideology. While the draft does not name specific banks, it criticizes institutions accused of cooperating with federal probes into the January 6 Capitol incident.
While banks argue that such actions fall under standard “derisking” policies — decisions made to avoid reputational or financial risk — critics say the practice has been weaponized against certain political viewpoints.
Earlier this year, the Federal Reserve announced it would stop considering “reputational risk” in its supervisory examinations, aligning with recent policy shifts at the FDIC and Office of the Comptroller of the Currency.
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