Major U.S. lenders are preparing for intensified scrutiny after the Office of the Comptroller of the Currency completed a supervisory review into allegations that banks improperly cut off customers. People familiar with the matter said the OCC is expected to publish findings in the coming weeks that will identify institutions and specific cases, and could result in formal disciplinary measures.
The review examined whether financial firms, including JPMorgan and Bank of America, severed or denied services for reasons tied to religion or political viewpoint - a practice often described as debanking. Sources also said the probe looked at whether banks denied services to legitimate sectors aligned with conservative interests, such as fossil-fuel companies, manufacturers of guns and crypto-related businesses.
Debanking generally denotes instances where a bank abruptly limits or terminates services for an individual or business. The issue has drawn heightened attention since a presidential order last year and ensuing regulatory focus on whether decisions by banks reflected political or ideological bias rather than standard risk management considerations.
Republican lawmakers and officials have for some time pressed Wall Street to abandon what they describe as partisan or "woke" policies, and several high-profile complaints and lawsuits have crystallized that pressure. Former President Donald Trump has publicly asserted that banks have closed accounts for political reasons, and he and affiliated entities have sued financial institutions over account closures, according to people familiar with the litigation.
Officials familiar with the matter said the U.S. Attorney's Office in Washington is conducting a parallel probe into debanking. Two sources confirmed that office's involvement and said it is examining similar conduct. The Wall Street Journal previously reported on that separate inquiry, according to those familiar with the probes.
Regulatory review and scope
In December, the OCC issued a preliminary report that flagged nine large banks for policies implemented between 2020 and 2023 that restricted services to particular industries or groups, or that imposed what the agency described as overly burdensome risk-management screening. The agency said then that it was reviewing those policies and about 100,000 related complaints.
Since releasing that initial assessment, the OCC has pursued multiple rounds of questions with the institutions under review. Sources said some banks were still responding to detailed inquiries in recent weeks. The regulator's questioning has focused closely on internal decision-making processes used to approve, deny or withdraw services, and the inquiries have been highly granular in scope.
Those familiar with the process told Reuters that the OCC's final supervisory review is likely to spotlight particular banks and instances it deems problematic. The findings could elevate some matters to formal enforcement, either by issuing private supervisory notices that require remedial action or by bringing public enforcement actions that could be resolved with penalties.
The OCC has said it is scrutinizing Citigroup, Wells Fargo, Capital One, U.S. Bank, PNC, TD Bank and BMO Bank in addition to JPMorgan and Bank of America. Spokespeople for the nine banks declined to comment on the record for this reporting.
Banks' stated reasons and industry reaction
Banking institutions have maintained that account closures and service terminations occur for a variety of reasons unrelated to political views. Commonly cited explanations include detection of unusual activity, insufficient documentation, or account usage that does not match the customer's declared purpose. Bank representatives have denied that political leanings drive such decisions.
Regulator comments echoed that the OCC is probing whether banks applied controls in ways that penalized customers for lawful conduct or that overemphasized reputational concerns. Comptroller Jonathan Gould told lawmakers this month that the agency was investigating debanking and exploring potential legal theories of liability. "We are well advanced in that process," he said.
Legal experts quoted by those familiar with the matter noted the uncertainty in pinning down a clear legal basis for enforcement. Many of the groups the OCC flagged would not necessarily be covered by traditional fair lending statutes, making it less clear how regulators might proceed. One source said the U.S. Attorney's Office is exploring whether banks violated a statute commonly used in bank-related fraud cases, the Financial Institutions Reform, Recovery and Enforcement Act of 1989. It was not clear if the OCC is pursuing a similar legal theory.
Stephen Gannon, a partner at Davis Wright Tremaine, said the OCC could contend that banks breached safety and soundness expectations by penalizing lawful customer activity or by placing undue weight on reputational risk when designing controls. Gannon noted that the concept of reputational risk has been criticized as vague, and was not being actively policed by federal regulators until last year.
High-profile complaints and corporate responses
Some complaints that have drawn political attention involve faith-based charities and conservative individuals. One widely publicized case involved Indigenous Advance Ministries, a Memphis-based Christian charity operating in Uganda, which alleged in 2023 that Bank of America closed its accounts on religious grounds. In responding to state-level scrutiny, Bank of America said the charity was engaged in debt collection activities and that the bank does not serve that sector or small businesses operating overseas. The charity did not respond to a request for comment in the reporting for this article.
Additionally, Sam Brownback, who leads the National Committee for Religious Freedom, has said that a JPMorgan account linked to him was closed in 2022 on religious grounds. JPMorgan said the account was closed because of inadequate information. Crypto firms have also complained that banks shunned their industry, and some of those firms are notable contributors to political campaigns.
In response to the political and regulatory scrutiny, a number of banks have revised or removed policies that had limited services to certain sectors. Sources said JPMorgan recently lifted restrictions on banking for several categories, including civilian rifle sellers, according to a letter the bank sent to a firearms trade group in January of this year. Citi also removed a policy last year that had curtailed services to retail clients selling firearms.
Possible outcomes and open questions
Those familiar with the OCC's review said they expect some matters to be escalated, but it remained unclear on what precise legal grounds enforcement would rest. The OCC could opt for either supervisory remedies or public enforcement actions. Private supervisory notices would require banks to alter their policies and practices, while public enforcement actions could lead to settlements and monetary penalties.
The U.S. Attorney's Office investigation could pursue different statutory theories than the OCC, as one source indicated prosecutors were considering the 1989 Financial Institutions Reform, Recovery and Enforcement Act. Reuters could not determine whether the OCC is evaluating that same avenue of enforcement.
For banks, the regulatory attention poses a policy and reputational challenge. Executives must balance compliance and risk-management responsibilities against heightened political scrutiny, while responding to regulators' detailed inquiries about how service decisions are made. Some institutions have already announced policy changes; others continue to answer OCC and law enforcement questions as the review concludes.
For now, spokespeople for the banks under review declined to provide comments to regulators or the press, and an OCC spokesperson declined to comment on the details of the supervisory review.