Trump Executive Order Targets Anti-Conservative Bias in Financial Services

President Donald Trump has issued an executive order targeting payments services, alleging that financial institutions have engaged in practices that interfere with individuals and businesses seeking to make payments based on political views. The order requires banking regulators to identify consumers denied payment processing services and notify alleged victims of discrimination. Trump has accused JPMorgan Chase and Bank of America of discriminating against him and his family, citing alleged incidents of "politicized or unlawful debanking actions." The order also addresses alleged anti-conservative bias in the US financial system.

President Donald Trump has issued an executive order targeting payment services, alleging that financial institutions have engaged in practices that interfere with individuals and businesses seeking to make payments based on political views. The order, titled "Guaranteeing Fair Banking for All Americans," requires banking regulators to identify consumers denied payment processing services and notify alleged victims of discrimination [1].

The executive order (EO) is part of a broader effort by the Trump administration to address alleged anti-conservative bias in the U.S. financial system. Trump has specifically accused JPMorgan Chase and Bank of America of discriminating against him and his family, citing alleged incidents of "politicized or unlawful debanking actions" [1].

However, the legality of the EO is shrouded in uncertainty. The executive order relies on the "unfairness" prong of the Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) provision in the Dodd-Frank Act and Section 5 of the Federal Trade Commission Act (the UDAP provision) to prohibit discrimination based on political beliefs or the nature of the business [1]. While the Equal Credit Opportunity Act (ECOA) prohibits discrimination based on religion and other grounds in connection with loans, it does not cover discrimination based on political beliefs or the nature of the business.

In March 2022, the Consumer Financial Protection Bureau (CFPB) amended the UDAAP section of its Exam Manual to encompass discriminatory conduct by banks and other companies supervised by the CFPB in connection with all products and services, even where fair lending laws may not apply [1]. However, a federal district court in Alabama granted summary judgment in favor of trade associations challenging the CFPB's authority to regulate discrimination under the UDAAP provision [1].

The court relied on the "major questions doctrine" to conclude that the CFPB lacks the authority to regulate discrimination based on political beliefs or the nature of the business. The doctrine states that courts will presume that Congress does not delegate to executive agencies issues of major political or economic significance [1]. The court found that the Dodd-Frank Act's language authorizing the CFPB to regulate unfair acts or practices is not the sort of "exceedingly clear language" that the major questions doctrine demands [1].

The CFPB's appeal to the Fifth Circuit was dropped after a change in leadership under the Trump administration. The Supreme Court's overruling of the Chevron case in September 2023 has further complicated the legal landscape, as courts should now give no deference to Trump's interpretation of the CFPB's UDAAP authority and Section 5 of the FTC Act [1].

To lift the cloud of uncertainty hanging over the legality of the EO, Congress would need to enact legislation essentially codifying the EO. However, it is uncertain whether the Senate will be able to muster 60 votes in favor of passage of either bill [1].

In addition to the legal uncertainty, the EO raises important policy questions. For example, what constitutes a "lawful business?" Determining whether a business is lawful may require extensive due diligence, particularly in areas where the bank or company lacks expertise, such as cryptocurrencies. The EO applies to businesses of all sizes, and it is unclear who will pay for the expenses associated with conducting such reviews [1].

References:
[1] https://www.consumerfinancemonitor.com/2025/08/15/is-there-legal-authority-for-trumps-debanking-executive-order/