After 9/11, the federal government enacted the Patriot Act to protect citizens and the country from further terrorist attacks. But in what some people would call an extreme reaction, Congress passed a bill that essentially put all Americans under surveillance:

It also beefed up the Bank Secrecy Act, giving Washington greater oversight over everyone in the U.S. financial system -- which amounts to pretty much everyone in the country. And it mandated that banks collect more data on their customers -- also known as ‘know-your customer protocols’” -- and report any suspicious activities.

Over the years, this machinery, which had in theory been created to stop terrorists from harming Americans, shifted its focus to Americans themselves. And it has shown up in a process called “debanking”:

Debanking is an attempt by major financial institutions, those with assets of more than $100 billion, to close the accounts of organizations or individuals with whom they disagree, whether politically or religiously. This growing and disturbing trend denies individuals, businesses, and non-profits access to financial services.

One of the most aggressive banks carrying out debanking is JPMorgan Chase. Not only are their actions egregious, but their demands on one client for keeping the account open were invasive and inappropriate. One of the organizations that was targeted was the National Committee for Religious Freedom (NCRF), which defends the rights of citizens to practice their faith freely. When NCRF found out from a depositor that the account was restricted and marked for closure, they tried to investigate the bank’s actions, but bank staff were unable to disclose information:

The following week, NCRF received a letter dated May 6 stating that Chase would close the account and end its relationship on May 9.

Eventually, a representative at Chase's corporate office said the bank might reinstate the account if NCRF disclosed a list of donors who contributed 10 percent or more of its operating budget and divulged the criteria it uses to decide whom to support politically. Respecting donors' privacy and skeptical that the bank made the same demands of other nonprofits, NCRF declined.

Later, when Chase was asked for confirmation of their demands, they not only denied the allegations but kept changing their story.

Another nonprofit committed to defending religious freedom, free speech, parental rights, and the sanctity of life has been targeted by Fidelity Capital:

The financial giant promises donor-advised fund account holders that it is ‘cause-neutral,’ and that it ‘does not limit grantmaking based on political, religious, or philosophical grounds.’ But over the last couple of years, Fidelity Charitable has told several donors that they can't give to ADF unless they relinquish their anonymity and put their name on the grant—a major deterrence to giving --because it ‘cannot be assured that the grant will be used exclusively for proper charitable purposes,’ to quote an e-mail sent to one donor.

Bank of America has joined this group of discriminating banks. It suddenly canceled the account of Indigenous Advance Ministries, a Memphis-based Christian ministry, stating that the organization was no longer aligned with the bank’s “risk tolerance.”

What can be done to stop these discriminating activities?

Shareholders are beginning to speak out:

One group filed a shareholder proposal with JPMC in response to the bank’s religious and politically motivated debanking. The proposal requested an audit detailing JPMC’s policies and practices as they affect individuals’ civil rights. Although the request was ultimately denied, the proposal’s presence and attention in JPMC’s shareholder meeting show positive momentum for solutions for political debanking. Indeed, five key financial companies -- Capital One Financial, Charles Schwab, JPMC, Mastercard, and Paypal -- had related votes in the last year, thanks to those who are speaking out against discriminatory DEI practices.

Twenty-three state attorneys general have sent out warning letters to banks who are discriminating in these ways.

State legislators are also passing laws to stop this type of discrimination. Florida developed comprehensive legislation in 2023 to address the issues of debanking:

Florida prohibits financial institutions from discriminating or canceling their services based on political opinions, speech, or affiliations, religious beliefs, exercise, or affiliations, and any action that considers a ‘social credit score’ including lawful ownership of a firearm, failure to meet environmental or social governance standards, and more. Florida also requires financial institutions to attest their compliance on an annual basis.

Other states have followed suit.

To send a powerful message to these banks, average citizens also need to speak up when their accounts are unreasonably closed. Apparently, few people protest, because they are busy trying to determine where they can deposit their excised funds. If you have not been pushed out by your own bank, don’t assume that you would not be a target. You are probably on someone’s list.

Forgotten amidst the controversy is that banks are beholden to this country and its citizens for the many benefits they enjoy:

Large national banks receive wide-reaching government benefits, such as greater lending power, FDIC insurance rates, subsidies, bailouts, and an anticompetitive chartering system.

That banks receive these advantages courtesy of the government and taxpayers obliges them not to discriminate based on viewpoints in their services. And the danger that these benefits might be taken away gives financial institutions good reason to end their risky entanglement with one-sided social activism and cancel culture.

It's time for debanking to be stopped.

Image: Harrison Keely