US President Donald Trump has signed an executive order aimed at safeguarding equitable access to banking services for all citizens of the country.

This directive mandates that federal regulators refrain from endorsing policies that permit financial institutions to deny or limit services based on an individual’s political or religious beliefs, or lawful business activities.

It instructs federal banking regulators to eliminate concepts such as reputational risk from their guidance and examination manuals, which could facilitate politicised or unlawful debanking practices.

Furthermore, the Small Business Administration is tasked with ensuring that financial institutions under its jurisdiction make efforts to reinstate clients who were previously denied services due to unlawful debanking.

In addition, the Secretary of the Treasury, in collaboration with the Assistant to the President for Economic Policy, is directed to formulate a comprehensive strategy to address politicised or unlawful debanking, which may include legislative or regulatory measures.

The order also compels federal banking regulators to scrutinise financial institutions for any past or present policies that may encourage such practices and to implement corrective actions, which could involve fines or consent decrees.

Moreover, regulators are required to examine supervisory and complaint data for instances of unlawful debanking based on religious grounds and to refer these cases to the Attorney General.

Instances have been noted where individuals and businesses have been denied banking services, which restricts their ability to maintain accounts and conduct transactions, stated Trump.

Trump noted that one notable case involved a major banking institution that initially refused to process ticket payments for a Republican event, only reversing its decision after public scrutiny.

Reports have also emerged indicating that federal regulators encouraged banks to monitor transactions involving certain retailers or specific terms associated with political affiliations, despite the absence of any criminal activity, according to Trump.

Earlier this year, the Senate Banking Committee convened to discuss these issues, with witnesses recounting their experiences of being debanked.

The order also addresses the digital assets sector, which has reportedly faced unfair debanking practices.

The Trump Administration has permanently ended Operation Chokepoint 2.0 by dismantling regulatory measures that restrict banking services for the digital assets industry.