Last week, US President Donald Trump issued an executive order directing bank regulators to rescind guidance that could lead to “politicised or unlawful debanking.”
Crypto businesses, and even some prominent conservatives — including the president himself — have alleged they were denied or lost access to bank accounts at the behest of politically-motivated, Biden-era regulators.
But last week’s executive order, entitled, “Guaranteeing Fair Banking for All Americans,” won’t do much for crypto businesses that fear they’ve been locked out of the traditional financial system, according to experts who spoke to DL News.
That’s because the order does little to root out “reputation risk.” The term refers to regulators’ ability to dissuade banks from engaging supposedly controversial customers, such as pornographers, firearms manufacturers, payday lenders, and crypto companies.
Critics of the practice say that banks should only consider objective criteria, such as a customer’s financial risk, when deciding whether to offer someone a checking account.