Last year, an article in Newsweek by Sam Brownback and Jeremy Tedesco highlighted a troubling trend toward debanking — banks suddenly refusing to deal with customers, often for unclear reasons.

Sam Brownback represents National Committee for Religious Freedom (NCRF) and Jeremy Tedesco represents Alliance Defending Freedom, groups that defend the civil rights of religious people:

Both of our organizations have had recent run-ins with debanking. The National Committee for Religious Freedom (NCRF)—a nonprofit advocacy group that exists to defend the right of everyone in America to live out their faith freely—opened a JPMorgan Chase checking account last April. A few weeks later, the bank shut down the account without explanation.

NCRF only found that out when one of its founders tried to deposit a donation at a local Chase branch on May 19. That’s when NCRF was informed that the account was restricted and marked for closure. All the local branch could share was that the corporate office had closed the account, and that bank employees weren’t permitted to give additional information. The following week, NCRF received a letter dated May 6 stating that Chase would close the account and end its relationship on May 9.

Eventually, a representative at Chase’s corporate office said the bank might reinstate the account if NCRF disclosed a list of donors who contributed 10 percent or more of its operating budget and divulged the criteria it uses to decide whom to support politically. Respecting donors’ privacy and skeptical that the bank made the same demands of other nonprofits, NCRF declined.

As pressure mounted over cancellation of the account, Chase changed its story several times. It initially denied asking invasive questions about donors but quickly changed its tune and claimed that it had to ask these questions to comply with federal banking guidelines on money laundering and funding terrorism.

Pressed on the weakness of this untenable rationale, Chase pivoted and claimed that, as a former U.S. senator and ambassador, I (Sam Brownback) am a “Politically Exposed Person”—a designation that Chase claimed triggers heavier scrutiny before NCRF could open an account. But the relevant guidelines specify that “Politically Exposed Persons” do not “include U.S. public officials.” Put simply, the rule Chase cited does not even apply.

“Stop the Troubling Trend of Politically Motivated Debanking,” March 15, 2023

Alliance Defending Freedom faced a similar problem with Fidelity Charitable.

It seems clear that the motive was political and had nothing to do with creditworthiness or suspicion about illegal activities.

While both industry and state governments are beginning to take action on politically motivated debanking, some recent news stories have shown a persistent pattern.

Venture capitalist Marc Andreessen recently told Joe Rogan that federal government involvement with the practice began during the Obama administration:

According to Marvie Basilan at the International Business Times,

The original operation was focused on the “de-banking” of legal marijuana businesses, escort services, and gun shops, Andreessen said. …

Andreessen, a well-known crypto advocate, went on to reveal that with OCP 2.0, outgoing President Joe Biden’s administration “extended” the initial operation’s focus toward “tech founders, to crypto founders, and then just generally political opponents.”

He added that in the last four years, around 30 founders in tech and crypto have been de-banked. “This is one of the reasons why we ended up supporting [Donald] Trump,” he said.

The biggest revelation was that “none of this was due process, none of this was written down,” there were no rules provided to the de-banked industry leaders, and there were allegedly no legal processes involved in the de-banking with Operation Choke Point 2.0.

“What Is Operation Choke Point 2.0 And Why Is Crypto Fuming Over It?,” November 29, 2024

Crypto mag Cointelegraph.com has been covering the story from the perspective of the debanked.

Interestingly, last March, it came out that the US Treasury Department had sent a list of “hate groups” to major US banks:

The listing classifies conservative organizations such as the Family Research Council, the Alliance Defending Freedom, the American Family Association, the Eagle Forum, Liberty Counsel, and others alongside avowed neo-Nazi and other white supremacist groups, such as the Knights of the Ku Klux Klan. compiled by the Institute for Strategic Dialogue and the Global Disinformation Index, two U.K.-based left-wing activist groups…

According to an investigation by the House Judiciary Subcommittee on the Weaponization of the Federal Government, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) sent the report to “some of the largest financial institutions in the world, including the very financial institutions that are likely responsible for providing financial services to many of the listed ‘hate groups.’”

In January, reports surfaced that FinCEN had urged banks to “comb through the private transactions of their customers” to look for “suspicious charges” of legal activities involving political and religious expression without warrants, including the purchase of religious texts and legal firearms.

Dan Hart, “Treasury Department Sent ‘Hate Group’ List of Conservative Organizations to Banks,” Daily Signal, March 12, 2024

At some point, these financial institutions may want to get back to banking, if only to restore trust. This happened in Canada too during the Convoy protests in 2022, and the result was not favorable to banks.

You may also wish to read: Debanking… when your bank acts like a political party. In Canada, ordered by the government, banks began to act like the party in power. Panic, chaos, and bank runs ensued. U.S. banks have been dabbling in politically based decisions for years but, with the stakes higher than ever, they may need to rethink their position.