By Nupur Anand, Saeed Azhar and Pete Schroeder
NEW YORK (Reuters) -Bank of America and JPMorgan are set to lobby the White House and Congress to defend themselves from accusations by President Donald Trump and others that they have shut down accounts of conservative customers on political grounds.
The banks said they need clearer guidance from the government on how best to police money laundering and provide services across a range of industries. On Thursday, Trump singled out JPMorgan Chase (NYSE:) and Bank of America, saying they did not provide banking services to conservatives.
Trump’s criticism echoed longstanding “debanking” complaints from Republicans, who have accused Wall Street banks of “woke capitalism,” as well as denying services to gunmakers, fossil-fuel companies and others perceived to be aligned with the political right. The two banks on Thursday denied they made banking decisions based on politics.
“We take this issue very seriously,” a BofA spokesperson said on Friday. “We will be engaging with the administration and Congress regarding the extensive government regulations that sometimes result in requirements to exit relationships.”
The spokesperson said the bank serves more than 70 million clients and welcomes conservatives.
“We never close accounts for political reasons and don’t have a political litmus test,” the spokesperson said.
The source familiar with the situation said that JPMorgan would also be lobbying for clearer regulation about assessing customers.
Bank lobby groups will also be part of the effort, according to the source familiar with the situation.
They will push the government to clarify anti-money laundering laws, establish a clear federal standard on fair access to financial services and streamline bank supervisory practices on who can be banked, said the source and two separate sources familiar with the matter.
WHAT BANKS WILL BE ASKING FOR
The Trump administration is expected to prioritize trimming regulations, and banks are hopeful that this could lead to some changes in rules and oversight which will enable them to have clearer standards around debanking, a banking source and two industry sources said.
None of the sources wanted to be identified as these discussion are private.
The U.S in 2020 passed a law overhauling anti-money laundering (AML) rules. However, the overhaul has not happened as planned. are still waiting for clarity on the new rules and will be pushing for new, clearer rules on AML, the banking source and one of the industry sources said.
Firms and individuals often see their bank accounts getting closed if there are concerns regarding the ability to police money laundering, both the sources said.
Different state laws on some of these issues have made banking more challenging, leading big banks to push for a clear federal standard on fair access to financial services, the three source said.
Banks also say the rules around who can be served are unclear, leading them at times to be hesitant to offer service to a particular industry or firms, the three sources said.
While regulators do not issue directives to avoid specific clients, they may flag some activity as risky, prompting banks to step back for fear of supervisory rebuke and fines.
“There should be far cleaner lines about what we have to do and we don’t have to do,” JPMorgan CEO Jamie Dimon said in a podcast this week, before Trump made his comments. “We’ve been complaining about this for years. We need to fix it.”
Lenders are also prohibited from informing customers why they have been debanked, opening the door for accusations of political bias.
“We have not debanked anyone because of political or religious relationships, period. Now, when we debank someone, they often blame that reason, but that’s not a reason,” Dimon said in the podcast.
