Debanking during the Biden Administration was a nefarious policy, if not criminal. Targeting individuals and entities for their political affiliations or disfavored businesses is obviously wrong. Some of the firms targeted were engaged in the digital asset sector, a segment of Fintech the Biden adminstration sought to destroy. While illicit or illegal entities should be scrutinized, debanking under Biden was something darker.
Last summer, the Trump Administration issued an Executive Order in an attempt to ban these activities by financial services firms.
At the same time, many state that debanking occurred largely because federal regulators intimidated the firms they regulate. While compelling debanking for political reasons may not have been explicit, the intent was obvious, as regulators under Biden issued statements that represented a bullying approach.
This past week, President Donald Trump announced a lawsuit against JPMorgan for its alleged debanking of some of the President’s firms. President Trump is seeking damages of up to $5 billion. The lawsuit was filed in Florida, a jurisdiction that may be more supportive of the legal action.
JP Morgan believes the lawsuit is without merit.
Cato Institute scholar Nicholas Anthony has issued a statement that he is of the opinion the lawsuit challenging JPM will fail:
“President Trump is unlikely to be successful in his effort to attack JPMorgan Chase over claims of political debanking. When you point a finger, three more are pointed back at you. In this case, those fingers are pointing at Congress, regulators, and the president himself. Congress set the laws that have made banks overly sensitive to legal risks, regulators set the laws that have made banks overly sensitive to social risks, and President Trump himself has made banking his political enemies illegal by designating Antifa as a terrorist organization. These factors are the real cause of debanking, not phantoms of political or religious discrimination. The problem of debanking can be fixed, but it won’t happen in the courtroom.”
The legal fisticuffs will probably take years to solve. While the biggest penalty may be the legal fees JPM will pay, hopefully, the practice of debanking will be recognized for what it is: political posturing that must be stopped.