It’s Time for Congress to Codify Trump’s Executive Order Banning Gun Industry De-Banking

Corporate banks that leaned on “reputational risk” are now dealing with their own risk to their reputations as policy and lawmakers are lining up behind President Donald Trump’s Guaranteeing Fair Banking for All Americans executive order.

“Reputational risk” appears nowhere in statute or regulation. Yet it was the thin veil by which “woke” banks covered themselves to justify their discrimination against politically-disfavored businesses – including the firearm industry. For years, banks denied essential banking services to firearm and ammunition businesses using this tactic to advance a woke gun control agenda. Some banks did it at the direction, and sometimes with a wink and a nod from previous administrations hostile to Second Amendment rights.

Under the Obama administration it was known as Operation Choke Point. But, during the first Trump administration many banks adopted woke discriminatory policies. And, during the Biden administration banking regulators were up to their old tricks and launched Operation Choke Point 2.0.

President Trump ripped back that thin veneer of discrimination when he signed his executive order telling federal banking regulators to remove reputation risk from their lexicon, policies and guidance documents. Banks and financial institutions are to return to making decisions about who to bank and provide financial services to based on individualized, objective and risk-based analysis.

In other words, no more boxing out businesses simply because “woke” corporate bankers and regulators find those businesses and the products they make politically distasteful. Political ideology has no place in making banking decisions – it never did.

Praise for the Woke Banking Crackdown

“Although more regulations will still need to be issued by the White House, what we have seen so far suggests Trump’s order is a gigantic victory for liberty,” wrote Justin Haskins for The Federalist. Haskins noted that firearm businesses were targeted by woke banks pushing a gun control agenda.

President Trump’s move is earning praise and support from those in Washington, D.C., who have been battling banking discrimination for years. Kelly Loeffler, Administrator of the Small Business Administration posted to X, “The SBA fully supports ‪@POTUS’ executive order to end the unlawful practice of debanking. As the government’s largest guarantor of business loans, we will hold our lenders accountable – and eliminate discrimination on the basis of partisan, religious, or ideological beliefs.”

Comptroller of the Currency Jonathan Gould issued a statement supporting President Trump’s order.

“Fair access to financial services is a fundamental principle of the U.S. banking system,” Gould said in a press release. “It is unacceptable for banks to discriminate against any customer on the basis of political or religious beliefs or lawful business activities. Today’s Executive Order affirms that banks should provide access to financial services based on individualized, objective, and risk-based analyses.”

Comptroller Gould noted that his office has already taken steps to take politics out of regulation of banks. The Office of the Comptroller of the Currency removed references to reputational risk from handbooks and guidance documents earlier this year. The OCC will force banks to remove reputational risk from their internal policy documents and begin a review to assess which banks it regulates have or are continuing to engage in unlawful de-banking.

Comptroller Gould served as chief counsel to the OCC during the first Trump administration and NSSF supported his nomination to his current role. Gould testified before the Senate that he would “shine a spotlight” on de-banking that plagued industries – including those in the firearm industry. He said “de-politicizing the baking system” is among his top priorities. He testified, “I think too often reputation risk is used as a pretext for other motives, and I think the regulators have at their disposal other forms of more easily quantifiable and just better understood, more precise, more objective terms, including litigation risk, [Bank Secrecy Act/anti-money laundering] compliance risk.”

Congress Wants to Codify

Capitol Hill was watching closely too, and lawmakers who have been calling for an end to banking discrimination abuses are ready to make President Trump’s executive order permanent.

U.S. Rep Andy Barr (R-Ky.) will introduce legislation to do just that. His bill would prohibit banks for denying services based on political or religious views for legally operating businesses. Rep. Barr said, in a press release, his bill will protect targeted businesses of debanking and at the top of the list of those businesses are firearm manufacturers and retailers.

Barr got quick backing from House Majority Leader Steve Scalise (R-La.). “This political discrimination – such as we saw with the Obama Administration’s ‘Operation Chokepoint’ – is unlawful, dishonest, and decreases trust in our banking institutions,” said Majority Leader Scalise, in part, in the press release. “Banks should be assessing legitimate financial risk – not the political views of hardworking and lawful individuals or businesses.”

NSSF praised Rep. Barr for his quick work to codify President Trump’s protection against banking discrimination.

“There is no room in the American economy for unelected Wall Street bankers to decide winners-and-losers based solely on how individuals or entities choose to exercise their Constitutionally-protected rights,” NSSF said in support of his planned bill.

Rep. Barr has been critical of banks discriminating against the firearm industry and others. He sponsored the NSSF-supported Fair Access to Banking Act, H.R. 987, which would require banks to provide access to services, capital and credit based on the objective risk assessment of individual customers, rather than subjective broad-based decisions affecting whole categories or classes of customers.

U.S. Sen. Kevin Cramer (R-N.D.), who sponsored the Senate version of the Fair Access to Banking Act, S. 401, praised President Trump’s order to end banking discrimination, posting on Facebook, “Momentum is building toward ending banks’ political discrimination! President Donald J. Trump’s executive order is a great next step toward protecting legal commerce from debanking activism. We need to pass the Fair Access to Banking Act!”

Chairman of the Senate Banking Committee Tim Scott (R-S.C.) also praised President Trump’s executive order and promised that more is to come.

“Debanking federally legal businesses and law-abiding citizens is un-American, and President Trump’s Executive Order (E.O.) is a critical step towards protecting Americans’ access to financial services,” Chairman Scott said in a press release. “I’ll continue to work with President Trump to end the debanking of law-abiding Americans and federally legal businesses on the basis of their political or religious affiliations.”

More Protections Pending

Chairman Scott sponsored the NSSF-supported Financial Integrity and Regulation Management (FIRM) Act, S. 875, which has already passed favorably from the Senate Banking Committee. That bill has a companion in the House, sponsored by Rep. Barr, introduced under the same title as H.R. 2702, which has also passed favorably from the House Financial Services Committee.

Those aren’t the only actions by Capitol Hill lawmakers. The NSSF-supported Firearm Industry Nondiscrimination (FIND) Act, was introduced by Rep. Jack Bergman as H.R. 45 and by Sen. Steve Daines as S. 137. Additionally, Rep. Riley Moore (R-W.V.) introduced  the NSSF-supported Protecting Privacy in Purchases Act as H.R. 1181, along with Sen. Bill Hagerty’s companion bill, S. 1715. That legislation would protect the Second Amendment privacy of firearm and ammunition purchasers from financial service and payment card providers compiling purchase history that has already proven to be exploited by the federal government for political purposes and denying lawful credit card transactions.

The message is clear. Attacks by banks on firearm businesses and the ability of law-abiding Americans to exercise their Second Amendment rights are over. Congress should act now to make these protections remain permanent and ensure a future White House administration cannot undo these protections with a stroke of a pen.

 

Larry Keane is SVP for Government and Public Affairs, Assistant Secretary and General Counsel of the National Shooting Sports Foundation.