After President Donald Trump released an executive order on ensuring fair banking for all Americans, ICBA said community banks are built to provide fair access to consumers.
Details: In a national news release, ICBA President and CEO Rebeca Romero Rainey distinguished community banks from larger institutions and said the community bank business model is rooted in local relationships and trust, not transaction volume or political motivations.
Statement: “Community banks are built to provide fair access to consumers given their long-standing and proven commitments to serving individuals, families, and small businesses in their communities with fairness, transparency, and personalized care,” Romero Rainey said, adding, “We have long supported the ability of banks to make individualized decisions about customer relationships based on sound risk management and legal compliance, which must be left to the discretion of banks, not regulators.”
Order Specifics: President Trump’s “Guaranteeing Free and Fair Banking for All Americans” executive order says:
No American should be denied access to financial services because of their beliefs, affiliations, or political views.
Banking decisions must be made on the basis of individualized, objective, and risk-based analyses.
Federal banking regulators within 180 days shall remove the use of reputation risk from guidance documents, manuals, and other materials used to regulate or examine financial institutions.
The Small Business Administration shall give notice to financial institutions with which it guarantees loans to identify and reinstate clients denied service through a politicized or unlawful debanking action.
The Treasury Department shall develop a comprehensive strategy to address politicized or unlawful debanking activities of financial regulators and financial institutions.
Each federal banking regulator shall conduct a review to identify financial institutions that have had policies or practices that facilitate politicized or unlawful debanking and to take appropriate remedial action.
ICBA View:
ICBA strongly opposed “Operation Choke Point” initiatives under previous administrations, which aimed to discourage financial institutions from providing payments and deposit services to legal but politically disfavored industries.
In the current Congress, ICBA encourages lawmakers to pass the Fair Audits and Inspections for Regulators’ Exams Act (H.R. 8071), which would improve the bank examination environment by creating an independent and workable appeals process and introducing important checks and balances to the regulatory system.