Reversing the Biden’s Administration “DeBanking” Campaign

Regulators Accused of Pressuring Banks to Drop Customers

In her memoir “Melania,” First Lady Melania Trump writes that her son, Barron Trump, was denied a new bank account at her preferred financial institution in the weeks after leaving the White House in early 2021 because of a political “cancel mob.”

Melania Trump writes: “The ‘cancel mob’ now includes corporations, traditional media, influential social media figures, and cultural institutions,” Melania wrote. “This disheartening trend reflects the current socio-political landscape in the United States. The cancellation continues — an attitude by businesses both big and small that never ceases to surprise me.” i

While many may be familiar with the penalties for violating social media’s “terms and conditions,” fewer know about “DeBanking.”

Speaking on the Joe Rogan podcast, investor Marc Andreessen spotlighted the DeBanking phenomenon. He said roughly 30 crypto and other companies’ founders had been quietly DeBanked. Andreessen called it “Operation Choke Point 2.0,” and claimed it was a campaign against “political enemies and then to their disfavored tech startups.”

“Debanking is when you, as either a person or your company, are literally kicked out of the banking system,” Andreessen explained. “Under current banking regulations….. there’s now a category called a ‘politically exposed person,’ PEP. And if you are a PEP, [banks] are required by financial regulators to kick them off, to kick them out of your bank.” “Basically, it’s a privatized sanctions regime that lets bureaucrats do to American citizens the same thing that we do to Iran, just kick you out of the financial system,” he said. “So this has been happening to all the crypto entrepreneurs in the last four years.” ii

Elon Musk shared Andreessen’s comments on X. Musk questioned whether the public knew that so many founders had been targeted for financial exclusion. Similarly, Coinbase CEO Brian Armstrong accused the Biden administration of pushing for banking restrictions against the cryptocurrency industry. He suggested that figures like Senator Elizabeth Warren and SEC Chair Gary Gensler were involved in these efforts and criticized them for trying to undermine the crypto industry.iii

It certainly seems incredible that a President’s family, the world’s richest man, and members of the crypto industry face “DeBanking.” So why do banks engage in DeBanking? Because of Federal regulators.iv

Federal regulators in the Biden years and before that during the Obama administration have put intense pressure on banks to avoid customers involved in unfavored businesses.

Beginning in 2012, the Obama administration used the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Board of Governors of the Federal Reserve System to coordinate a campaign to weaponize the banks against industries that had fallen out of favor with the administration—including gun stores, legal marijuana dispensaries, pawn shops, tobacco stores, payday lenders, and a host of other brick-and-mortar businesses. That campaign was called Operation Choke Point.v

This list has been expanded to include crypto for the Biden era. Curiously, the demands are not contained in formal regulations. Instead, the regulators let banks know they will be viewed unfavorably if they do business with specific types of customers. Given regulators’ immense power over banks, such persuasion is all it takes.

Coinbase CEO Brian Armstrong has joined several other crypto founders in accusing the Biden administration of using financial exclusion and DeBanking to destroy the crypto industry. The CEO claimed that the allegations of misconduct, part of the rapidly growing theory of “Operation Chokepoint 2.0,” are likely to have “Elizabeth Warren’s fingerprints all over them.”vi

Republican Rep. French Hill has announced plans to investigate “Operation Choke Point 2.0” thoroughly. Hill criticized the campaign for targeting legitimate businesses.vii In September, Senator Mike Lee, a Republican from Utah, introduced the Saving Privacy Act. The libertarian Cato Institute explains the bill “would essentially end the practice of requiring banks to act as law enforcement agents and would prevent law enforcement agencies from accessing customers’ financial records without first obtaining a valid warrant.”viii

While new legislation could be helpful, a change in the underlying philosophy of banking regulators is also necessary since the agencies have been using their informal powers to bend banks to enforce their political agenda.

i https://nypost.com/2024/10/09/us-news/barron-trump-was-denied-bank-account-due-to-cancel-mob-mom-melania-claims/?utm_medium=social&utm_source=twitter&utm_campaign=nypost

ii https://www.realclearpolitics.com/2024/12/02/biden_admin_debanking_people_over_politics_636674.html

iii https://cryptoslate.com/crypto-debanking-wave-tied-to-political-figures-coinbase-ceo-brian-armstrong-alleges/

iv https://www.whitecase.com/insight-alert/new-operation-choke-point-quickly-changing-rules-crypto-activities-member-banks

v https://www.cooperkirk.com/wp-content/uploads/2023/03/Operation-Choke-Point-2.0.pdf

vi https://www.ccn.com/news/crypto/coinbase-ceo-elizabeth-warren-debanking-crisis/

vii https://coinness.com/en/news/38504 viii https://www.thefp.com/p/debanking-america-melania-barron-trump-january-6-muslims

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