De-banking, as it’s known, has become a hot-button issue that refers to the practice of financial institutions cutting off access to banking services for customers based on non-fiduciary reasons. Typically, a bank cancels or punishes a customer with little to no explanation, referring only to vague and imprecise terms of service policies like “reputational risk.” That uncertainty makes customers wonder whether they were victims of political or religious discrimination in banking.
Notable incidents include Deutsche Bank and Signature Bank’s closure of former President Donald Trump’s accounts and similar cases impacting his family members. During his address to the World Economic Forum shortly after being sworn in for the second time, Trump called out Bank of America CEO Brian Moynihan for the bank’s particularly disturbing track record of politicized de-banking.
This wasn’t the first time Bank of America was put under the national spotlight for its apparent discrimination along political and religious lines. Last year, 15 state attorneys general and 15 state financial officers wrote public letters calling for Moynihan to provide transparency into the bank’s practices. Both letters highlighted Bank of America’s cancellations of Christian ministries like Timothy Two Project International, which trains pastors in impoverished areas around the world, and Indigenous Advance Ministries, which serves orphans and widows in Uganda.
In the latter case, even a Memphis, Tennessee-based church that occasionally supports the ministry received a notice of cancellation. Predictably, the notices all came with zero explanation.
But while Bank of America has a uniquely eye-popping rap sheet on de-banking, other large nationally chartered banks like JPMorgan Chase have also created a long list of victims. The problem is so extreme and obvious that it’s drawn notes of bipartisan action in the U.S. Senate, where Senator Elizabeth Warren has indicated her willingness to work with Republican Senator Tim Scott and President Trump to solve the problem at the federal level.
Three States Enact De-Banking Legislation
In 2024, Florida and Tennessee made significant moves against politicized de-banking by enacting legislative protections for citizens in the crosshairs of discriminatory decision-making by powerful financial institutions. Most recently, Idaho Governor Brad Little signed into law the 'Transparency in Financial Services Act.' This legislation seeks to combat the growing issue of financial institutions denying services to individuals and organizations based on their religion, politics, or other protected attributes.
Opponents of de-banking solutions want to pretend that it’s a manufactured problem. Those opponents, who almost invariably draw a handsome paycheck directly from banking associations to testify against state-level bills, are increasingly finding their arguments falling on deaf ears.
In Montana, for example, de-banking bill opponents were recently caught off-guard when a member of the Senate Business, Labor, and Economic Affairs Committee took to the podium to share how he was de-banked.
In Idaho, banking lobbyists were also at a loss for words when Tony Ullrich stood up to share how U.S. Bank cancelled his group, the Idaho Constitution Party, just as the 2024 political season was getting underway.
States like Idaho, Florida, and Tennessee are doing the right thing by guarding against de-banking, and the prospect of the federal government doing its part to correct the problem should encourage us all. But at the same time, the banks themselves need to start seeing themselves as agents of their own reform.
That’s why our friends at the American Conservative Values ETF, with the help of Alliance Defending Freedom (ADF), Inspire Investing, and Ullrich, have filed a shareholder resolution calling for transparency aimed at producing lasting change at U.S. Bank.
The resolution urges U.S. Bank to ensure that customers are not denied services based on their political or religious beliefs, a critical step toward protecting freedom of thought and expression in America’s financial system.
Tony Ullrich and the Idaho Constitution Party aren’t the first victims of debanking, but they’d like to be the last. As Tony puts it, their voices—and their funds—should not have been silenced by arbitrary decisions made behind closed doors. See my interview with Tony Ullrich.
Indeed. No American should have to worry that their bank will cancel or punish them for their peaceable religious or political beliefs or affiliations. That’s common sense, and it’s at the heart of what it means to live as a truly free citizen.
Tim Schwarzenberger, CFA, has been with Inspire since 2021 and serves as Portfolio Manager for Inspire’s ETFs and SMA strategies. He is also Inspire’s Director of Corporate Engagement, leading the firm’s efforts to influence companies on issues of importance to Christian investors.
Author's Note: Advisory Services are offered through Inspire Investing, LLC, a Registered Investment Adviser with the SEC. All expressions of opinion are subject to change. This article is distributed for educational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Investors should talk to their financial advisor prior to making any investment decision.
Inspire Investing is not affiliated with, nor does it endorse, any political party or candidate. The individuals and organizations mentioned are not clients of Inspire Investing and were not compensated for being referenced in this article.