U.S. banks and regulators will face scrutiny on Wednesday as the Senate Banking Committee examines claims that financial institutions deny services to certain industries or political groups. The hearing will focus on “debanking,” with testimony from business owners and experts who allege unfair treatment.
Banks deny ideological bias, instead blaming complex regulations and opaque supervisory practices that sometimes make it difficult to provide services or explain account closures. The hearing could shape future policies, including new rules or national legislation to standardize banking access.
“This hearing is the beginning of the committee’s work to end this practice,” said a spokesperson for Senator Tim Scott, the committee’s Republican chairman. Witnesses include the head of Anchorage Digital, a crypto platform that claims to have been debanked, and Old Glory Bank, founded in 2022 as a response to debanking concerns.
Republican-led states have introduced legislation to combat perceived discrimination by banks, creating a patchwork of laws that frustrates the industry. The issue gained attention in January when former President Donald Trump accused Bank of America and JPMorgan Chase of denying services to conservatives, reinforcing concerns about “woke capitalism.” The banks denied these claims.
The banking industry is now pushing for clearer federal rules, advocating for a national fair-access standard, improved anti-money laundering regulations, and streamlined supervision to help banks navigate compliance.
“Only federal legislation can provide clarity and protection,” noted Jaret Seiberg, an analyst with TD Cowen, emphasizing the need to preempt conflicting state laws.
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