WASHINGTON/NEW YORK - U.S. President Donald Trump on Tuesday said he believes that banks discriminate against him and his supporters, adding that Bank of America and JPMorgan Chase had previously refused to accept his deposits.
“They totally discriminate against, I think, me maybe even more, but they discriminate against many conservatives,” he told CNBC in an interview. “I think the word might be Trump supporters more than conservatives.”
Trump made the comments when asked about a report by the Wall Street Journal that said he planned to punish banks that discriminated against conservatives, but did not address the order specifically.
The order instructs regulators to review banks for “politicized or unlawful debanking” practices, according to a draft reviewed by Reuters.
“Well, they did discriminate,” Trump said of actions taken by JPMorgan Chase after his first term in office. “I had hundreds of millions, I had many, many accounts loaded up with cash ... and they told me, ‘I’m sorry sir, we can’t have you. You have 20 days to get out.’”
Trump said, without providing evidence, that he believed that the banks’ refusal to take his deposits indicated that the administration of former President Joe Biden had encouraged banking regulators to “destroy Trump.”
Trump said he subsequently tried to deposit funds with Bank of America and was also refused, and eventually split the cash among a number of smaller banks.
“The banks discriminated against me very badly,” he said.
In a statement, JPMorgan did not address the president’s specific claim that it had discriminated against him.
“We don’t close accounts for political reasons, and we agree with President Trump that regulatory change is desperately needed,” JPMorgan said. “We commend the White House for addressing this issue and look forward to working with them to get this right.”
Bank of America also did not address Trump’s specific claims in the CNBC interview.
‘Reputational risk’ issue
During President Joe Biden’s administration, regulators could have asked the banks why they were providing banking services to Trump because of the “reputational risk” issue, a source familiar with the matter said.
Another source said that banks were under intense scrutiny and pressure with regards to what qualified as a reputational risk for banks and they needed to be careful due to Trump’s legal entanglements.
The source also added that at present JPMorgan continues to have a banking relationship with members of the Trump family that dates back to years ago and that they also bank a number of campaign accounts related to Trump.
After President Trump took power, the Federal Reserve announced in June it was directing its supervisors to no longer consider “reputational risk” when examining banks, scrapping a metric that had been a focus of industry complaints.
The Wall Street Journal reported late Monday that the expected executive order would instruct regulators to investigate whether any financial institutions breach the Equal Credit Opportunity Act, antitrust laws or consumer financial protection laws by dropping customers for political reasons.
It said the order could be signed as early as this week, authorizing monetary penalties, consent decrees or other disciplinary measures against violators.
The White House had no immediate comment on the reported order.
“What the White House is doing is telling the banks not to hide behind regulations to deny loans or banking relationships,” said Wells Fargo bank analyst Mike Mayo. “The banks can use their normal underwriting standards and deny services, but not blame regulators or use reputational risk as a justification.”
Bank of America said it welcomed the Trump administration’s efforts to provide regulatory clarity to banks.
“We’ve provided detailed proposals and will continue to work with the administration and Congress to improve the regulatory framework,” the bank said.
Trump in January said the CEOs of JPMorgan Chase and Bank of America denied services to conservatives. At the time, the two banks denied making banking decisions based on politics.
“This seems to be rhetoric that will likely be forgotten by lunchtime,” said David Wagner, head of equities at Aptus Capital Advisors. “I don’t see any material impact on banks, as there are many other drivers that will ultimately presage performance for banks, such as deregulation.”
JPMorgan and Bank of America shares both fell over 1%, in line with a decline for the broader S&P Bank index.
Banks have consistently argued that any complaints about “debanking” should be aimed at regulators, as they argue onerous rules and bank supervisors policing firms can discourage them from engaging in certain activities.
“The heart of the problem is regulatory overreach and supervisory discretion,” the Bank Policy Institute, an industry group, said in a statement.
“The banking agencies have already taken steps to address issues like reputational risk, and we’re hopeful that any forthcoming executive order will reinforce this progress by directing regulators to confront the flawed regulatory framework that gave rise to these concerns in the first place.”
(Reporting by Andrea Shalal and Doina Chiacu; Additional reporting by Pete Schroder, Nupur Anand, Tatiana Bautzer and Saeed Azhar; Editing by Andrew Heavens, Lananh Nguyen, Alison Williams and Nick Zieminski)
