Trump Executive Order Forces Banks To Do Business With Risky Clients

WASHIINGTON, DC - On August 7, Donald Trump signed an Executive Orderaimed at eliminating alleged "debanking" discrimination against bank customers on political or religious grounds. This dangerous directive clears the way for the crypto industry, fossil fuel polluters, and other criminally-connected and credit-dubious entities to access financing and banking services regardless of their risk to the financial system.

"Climate and other ESG risks are real, measurable, and financially material. Evaluating these criteria to inform lending decisions, including to avoid clients whose activities are risky or destabilizing to financial markets, isn't politically motivated, it's prudent business. Forcing banks to ignore these risks not only undermines sound decision-making, but threatens market resilience. History shows that disregarding clear financial red flags, as before the 2008 crisis, can have devastating consequences for markets and the economy. The Trump administration's move is clearly a step to serve the interests of entrenched political and financial allies, not the American public," said Jessye Waxman, Campaign Advisor, Sierra Club Sustainable Finance Campaign.

The executive order forces banks to do business with clients they would otherwise reject based on sound risk management practices. Even former GOP Banking Chair turned crypto lobbyistPat Toomey has acknowledgedthat these forced financing policies - where the government compels banks to do business with certain clients - are anti-free market and authoritarian in nature.

The executive order directs federal banking regulators to remove "reputational risk and other equivalent concepts" from their guidance and examination materials. This dangerous deregulation eliminates critical safeguards that protect the banking system from risky clients, credit-dubious entities, and potentially criminal activity. Banks will be forced to reinstate clients they previously denied services to, regardless of legitimate risk concerns or compliance issues.

Trump's so-called"debanking" crusade is nothing more than a right-wing conspiracy theorydesigned to spread the false narrativethat banks systematically discriminate against conservatives and polluting corporations. But the truth tells a different story: this executive order prioritizes industry-backed special interests over the financial safety of working Americans.

About the Sierra Club

The Sierra Club is America's largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit https://www.sierraclub.org.