If more states take up the cause of eliminating the politicization of access to our economy, the resulting state laws may spur Washington, D.C., to action.
L ast week, President Donald Trump took significant action on an issue the first family has personal experience with, by signing an executive order to root out discriminatory debanking policies both from federal regulation and, where appropriate, the private sector. My colleagues at Alliance Defending Freedom worked closely with the White House to develop the policies and directives in the executive order and will continue to work on eliminating ideological shibboleths from the marketplace, one of the most pressing economic issues of our time. But a future administration can undo any regulatory action.
Ever since President Barack Obama famously promised to govern with a “pen and a phone,” presidents from both parties have increasingly utilized executive orders to advance policy agendas stalled or blocked by opposition in the legislative process. Typically, these moves are hailed as leadership by the president’s party and decried as overreach by the opposing party. Regardless of which party controls the White House, lawmakers in the federal and state legislatures should not abdicate their constitutional role in the policymaking process. Such is the case with Trump’s executive order, “Guaranteeing Fair Banking for All Americans.”
America’s free market economy, combined with republican principles of separation of powers and limited government, has made our nation an economic superpower the likes of which are rarely seen in history. However, for our economy to be truly free, it must be free from discrimination. Access to basic financial services is essential to participation in the free exchange of goods and services. Certainly, banks are well within their rights and fiduciary responsibilities to evaluate potential customers on a wide range of fiscal parameters, but religious and political beliefs are not and should not be among them.
Locking people out of the financial system for their political or religious beliefs is not just wrong — it is un-American. As President Calvin Coolidge said, “After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing, and prospering in the world.” No one should worry that they could lose their bank account or have a payment declined because of their deeply held beliefs. In the same speech, Coolidge went on to say, “The chief ideal of the American people is idealism. I cannot repeat too often that America is a nation of idealists.”
States such as Tennessee and Idaho and major banks such as Chase, Citibank, Charles Schwab, PNC Bank, Regions Bank, and Western Alliance have taken steps to protect against discriminatory debanking with assistance from ADF. While it should be credited to Trump for taking this issue seriously enough to direct his administration to protect every American from losing access to their finances due to vague or weaponized “reputational risk” policies, there is no executive substitute for well-crafted legislation.
It cannot be repeated too often that presidents are not legislators. An executive order can only enforce what federal law requires. Congress has the opportunity, if it has the will, to solidify this directive into law and strengthen the protections against ideological gatekeeping at the entrance to our national marketplace.
Moreover, other states should follow the lead of Tennessee and Idaho, which have enacted laws against politicized debanking and provided actual legal remedies to victims of debanking. In our federalist system of constitutional order, states are the “laboratories of democracy.” A closely divided U.S. House and Senate may take time, procedural prowess, and an injection of political courage from their constituents to act. State lawmakers can supplement the top-down approach with a bottom-up approach to the needs of the American people. Is it any wonder that the vast majority of meaningful conservative legislation we have seen in the last decade has been passed by the states, not Congress?
If more states take up the cause of eliminating the politicization of access to our economy, the resulting accumulation of state laws may spur their counterparts in Washington, D.C., to action. The more states that prohibit or limit debanking, the more likely we are to achieve federal legislation that reflects or adopts these meaningful protections instead of swamp-watered-down protections.
The president and regulators are doing their part; it is time for legislators to do theirs.