Justice Department issues subpoenas to major US banks in debanking inquiry 

Federal prosecutors in Washington have issued wide-ranging subpoenas to several of the largest US banks, including JPMorgan Chase, Bank of America and Wells Fargo, seeking records tied to claims that customers were denied banking services or had accounts shut for political reasons, according to the Wall Street Journal. 

The requests were sent by the US Attorney’s Office in Washington, DC, led by Jeanine Pirro. They broaden an effort backed by President Donald Trump to examine whether banks treated conservatives and other politically sensitive sectors unfairly, including businesses linked to his family. 

Trump said last year that after his first term ended, JPMorgan and Bank of America closed his accounts and refused to open new ones for him following the violence at the Capitol. 

In August, Trump signed an executive order telling banking supervisors to look into whether lenders had engaged in “politicised or unlawful debanking” and to respond as needed, including through financial sanctions.  

Banks have already handed substantial amounts of material to regulators, but Pirro’s office is now separately seeking information from major institutions, people familiar with the matter said. 

Lenders have said account closures are not based on religion or politics. They have argued that decisions involving certain clients or sectors reflect legal duties to monitor for criminal conduct and money laundering, as well as other supervisory demands designed to protect the banking system. 

Up to this point, the main review had been handled by the Office of the Comptroller of the Currency, the Treasury bureau responsible for supervising the biggest banks in the country.  

Trump’s executive order, however, also told regulators to pass cases to the attorney general when appropriate. 

People familiar with the matter said the OCC had not referred cases to the Justice Department and that Pirro’s office began its inquiries independently. One of those people said the OCC and the US attorney’s office are now working together on the matter. 

Two prosecutors involved in the banking inquiry, Carlton Davis and Steven Vandervelden, visited the Federal Reserve construction site in April and asked to be shown around, in a move that was seen by some as provocative during that separate dispute. 

The subpoenas, some of which were sent last year, ask the banks for lists of individuals said to have been debanked and for explanations of why their accounts were closed, according to the people. 

In December, the OCC published an initial report saying it had found early signs of debanking at the nine largest banks. It said the sectors affected included oil and gas, coal, firearms makers and adult entertainment. The agency also referred to banks’ public statements on environmental and social goals, including action on climate change and racial inequality. 

Pirro’s office is examining whether the banks’ conduct may have broken laws including the Financial Institutions Reform, Recovery and Enforcement Act of 1989, some of the people said. That statute has mainly been used in cases involving fraud connected to banks. 

After the 2008 financial crisis, the Justice Department used the law in cases alleging that banks had misstated the quality of mortgage-backed securities tied to the crash. 

In January, Trump sued JPMorgan and chief executive Jamie Dimon, claiming the bank shut his accounts for political reasons after the 6 January 2021 Capitol riot. Last year, the Trump family also brought a case against Capital One, saying the bank informed Trump-linked businesses in 2021 that it would close more than 300 accounts. 

The banks have denied any unlawful conduct in shutting the accounts. 

In February, The US Federal Reserve introduced a draft rule that would change how bank examiners evaluate risk, proposing an end to the use of reputation risk in supervisory decisions. 

The proposal, now open for public comment, would prevent examiners from discouraging banks from serving customers involved in lawful activities. 

Instead, supervisory focus would shift to risks posing a direct threat to a bank’s stability and soundness.