Nupur Anand, Saeed Azhar and Pete Schroeder
New York (Reuters) – Bank of America and JPMorgan are expected to lobby the White House and Congress to defend themselves against accusations by President Donald Trump and others that they closed the accounts of conservative customers on political grounds.
Banks have said they need clearer guidance from the government on how best to police money laundering and service across industries. Trump singled out JPMorgan Chase (NYSE 🙂 and Bank of America on Thursday, saying they don’t bank with conservatives.
Trump’s criticism echoed a longstanding “debunking” of grievances by Republicans, who have accused Wall Street banks of “awakening capitalism” as well as denying favors to gunmen, fossil fuel companies and others seen as aligned with the political right. The two banks denied on Thursday that they made banking decisions based on politics.
“We take this issue very seriously,” a BOFA spokesman said on Friday. “We will be dealing with the administration and Congress regarding the extensive government regulations that sometimes result in exit requests.”
A spokesman said the bank serves more than 70 million customers and welcomes Conservatives.
“We never close accounts for political reasons and have no political litmus test,” the spokesperson said.
A source familiar with the situation said JPMorgan will also lobby for clearer regulation on customer valuation.
Bank lobbying groups will also be part of the effort, according to a source familiar with the situation.
They will push the government to clarify money-laundering laws, establish a clear federal standard on fair access to financial services and streamline bank supervisory practices about who can bank, the source and two separate sources familiar with the matter said.
What the banks will be looking for
The Trump administration is expected to prioritize pruning regulations, and banks hope that could lead to some changes in rules and oversight that will allow them to have clearer standards around debanking, a banking source and two industry sources said.
None of the sources wanted to be identified because the discussion is private.
In 2020, the US enacted Anti-Money Laundering (AML) rules. However, the overhaul did not take place as planned. They are still waiting for clarity on the new rules and are pushing for new, clearer AML rules, the banking source and one of the industry sources said.
Companies and individuals often see their bank accounts closed if there are concerns about the possibility of money laundering, both sources said.
Differing state laws on some of these issues have made banking more challenging, leading big banks to push for a clear federal standard on fair access to financial services, three of the sources said.
Banks also say the rules around what can be delivered are unclear, sometimes making them hesitant to serve a particular industry or company, three of the sources said.
While regulators don’t issue directives to avoid certain clients, they can flag some activity as risky, prompting banks to pull back for fear of supervisory fraud and fines.
“There should be a much cleaner line about what we have to do and what we don’t have to do,” JPMorgan CEO Jamie Dimon said on a podcast this week, before Trump made his comments. “We’ve been complaining about that for years. We have to fix it.”
Lenders are also prohibited from informing customers why they have been disqualified, opening the door to accusations of political bias.
“We didn’t debunk anybody because of political or religious affiliations, period. Now, when we debunk somebody, they often blame that reason, but that’s not the reason,” Dimon said on the podcast.
