Debanking flows downhill from progressive policymakers

The US Office of the Comptroller of the Currency (OCC), a leading federal financial regulator, has released preliminary findings from its review of debanking activities at the nation’s largest banks between 2020 and 2023. The report finds that “…the banks maintained public and nonpublic policies restricting certain industry sectors’ access to banking services, including by requiring escalated reviews and approvals before providing access to financial services.” It further notes that financial services were restricted or denied based on the perceived negativity of clients’ business sectors or political beliefs, a charge many of the institutions examined have publicly denied. 

The investigation, pursuant to President Trump’s Executive Order 14331, “Guaranteeing Fair Banking For All Americans” (8/12/25), is, for many people, an overdue implement of accountability for big financial institutions that arrogantly closed accounts or denied services based on subjective personal criteria. But looking at the entire sweep of the last several years of politics and public policy in the finance world, it is clear that most institutions were attempting, with varying degrees of finesse and skill, to stay on the favorable side of federal regulators and politicians. In practice, this meant placating powerful political actors who frequently sent not-so-subtle signals as to which policies would get banks favorable treatment and which would yield greater scrutiny.

The OCC report’s list of business sectors allegedly denied full access to financial services reads, for the most part, like a laundry list of progressive political targets: oil and gas exploration, coal mining, firearms manufacturing, private prison operation, payday lending, tobacco distribution, and digital asset investment. Perhaps the only category identified in the report that doesn’t fall into the “hated by Democrats and beloved by Republicans” dichotomy is adult entertainment. Even that category, however, has a history of attacks from Democratic policymakers, as it was one of the sectors subject to the original Operation Choke Point under the Obama administration, itself an earlier instance of systematic debanking via federal regulators (see the 2014 blog post “Operation Choke Point Targets Porn and Firearms, Potentially Violating the Constitution”).

It would be much easier to make the case that debanking decisions weren’t politically motivated if their list of targets wasn’t so comedically lopsided. We would have to imagine a world in which companies selling “In This House…” lawn signs, Hamas-adjacent headscarves, and copies of the White Fragility workbook were being denied financial services in order to assume some level of balance. Contrary to the assumption of previous generations that banking and financial services were the most stuffy and conservative of all industries, it has become clear for some time that the weaponized political campaigns of motivated activists and government officials have made deep inroads into the Wall Street ecosystem. As in most parts of the American economy, virtue-signaling to the idols of the progressive left has simply become another kind of career insurance.

The vast majority of the cases of politicized debanking that have surfaced in the past few years can thus be considered abuses not by bank executives, but by federal bureaucrats and politicians attempting to bully and intimidate the firms they oversee (and have the ability to punish) into adopting a particular set of progressive-left policy priorities. Some of these were voluntarily embraced, of course, under the aegis of the environmental, social, and governance (ESG) investing movement. But that merely moves the first cause back a step, as the ESG investing movement itself was an elite-driven campaign driven by monetary and fiscal policymakers around the world, in coordination with central banks and international institutions like the United Nations and its Sustainable Development Goals. 

Individual and business owners who were denied financial services because of their political beliefs or politically disfavored business types have every right to be upset, and clearly many are – they’re the ones who filed the nearly 100,000 consumer complaints that the OCC staff is still sorting through. But the original impetus behind the vast majority of these decisions was the organized pressure from government officials and their friends in the progressive political movement (often the same people at different times in their careers). The unspoken implication behind this pressure is that large banks who don’t play ball will face more scrutiny and hostility from government regulators, which will itself create the “reputational risk” that embracing ESG protocols promises to solve. The single biggest problem is the undue discretion of government officials and their ability to reward or punish private actors outside of the normal due process of law.

The OCC report emphasizes that its investigation is ongoing and more analysis will be forthcoming, so industry observers should expect more material to be released in 2026. The OCC’s new report can also be read in the same light as the recent analysis published by the US House Committee on Financial Services, “Operation Choke Point 2.0: Biden’s Debanking of Digital Assets.” Cato Institute analyst Nick Anthony recently published an excellent review of that study in his Substack newsletter Banking, Bureaucracy, and Beyond. Nick was also my guest on Free the Economy Episode 111, “Defend Yourself from Debanking with Nick Anthony.” Finally, for more discussion of these issues, including my interview with SEC Commissioner Hester Peirce on voluntary vs. mandatory ESG investing, see the archive of CEI’s Financial Weaponization Summit from last December.