Aiming to crack down on financial institutions that terminate relationships with customers due to political or ideological beliefs, President Donald Trump issued an Executive Order to address these debanking concerns Thursday.
The order directs federal financial regulators to investigate whether these types of alleged account closures violate laws, such as the Equal Credit Opportunity Act or other consumer protection rules. Financial institutions found in violation could face fines, consent orders, or other enforcement actions.
“The not-for-profit credit union system thrives by serving the diverse financial needs of all Americans. Industry bylaws have long reflected a mantra of ‘once a member, always a member,’ and despite regulatory pressures, it would be counterintuitive for a credit union to limit its membership beyond what the law requires. Some credit unions have also endured costly litigation in order to serve higher risk members. Guided by the industry’s cooperative principles, credit unions continue to welcome Americans of all backgrounds, including those in unique economic sectors or with complex financial profiles, but we strongly support credit unions’ ability to lawfully manage risk,” said America’s Credit Unions President/CEO Jim Nussle. “We look forward to working with the NCUA to protect credit union interests in implementing the executive order, and with the Administration and Congress to limit regulatory overreach to protect consumers’ access to credit unions.”
America’s Credit Unions has engaged the White House and the NCUA on this issue and will provide formal comments to ensure credit unions are not negatively impacted by any policies stemming from the implementation of this order.
For more information, email Lisa Quaranta.
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For more information, email Lisa Quaranta.
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