Trump is right about debanking

Last week, President Trump issued an executive order against denial of bank services based on politics, and the banks responded by blaming the Biden administration for a practice that they formerly denied even existed.

For those of us who have been on the front lines of the battle over this issue, the taste of both justice and vindication is a sweet savor.

Our firm Bowyer Research partnered with financial advisor David Bahnsen to take on the issue of debanking, first at Truist Bank and then later, working with Alliance Defending Freedom, at JPMorgan Chase. ADF and Bowyer Research also worked with American Family Association and Patron Partners and others to engage with other banks.

Along the way, we identified a few stages in the debanking detox process.

First, denial. Every single bank simply denied that debanking occurred. The clients were “unsuitable” for undefined or shifting reasons, none of which had anything to do with politics, we were assured. Former Ambassador Sam Brownback just had the wrong risk profile or ran afoul of various statutes designed to exclude terrorist and international money launderers (?!!?) or he didn’t fill out his paperwork properly.

Even Saturday Night Live, the court-prophet-jester, joined in the act, suggesting that Trump talking about debanking is a sign of mental illness in which he simply makes things up.

The proxy advisory services played their role in the process by denying that debanking was a risk. That meant that most asset managers followed their lead and voted (with your money) against any shareholder attempts to hold banks accountable. And, if you believe that your faith-aligned asset manager was voting differently on this issue, I assure you that they very likely were just following the herd and voting with the banks against Brownback.

Second, “shut up.” In this phase the companies appealed to the SEC to block ADF-authored proposals from Bahnsen, Patron, and AFA from appearing on corporate ballots. They lost.

Third, “the thing we said that we didn’t do, we did because the government made us do it.” There is some truth to this, but of course it contradicts the previous denials. It also creates an opportunity for a do-over. If the banks were forced into it by the Biden administration, then the election of Trump was their chance to say loud and clear for all to hear that they have changed their policies to a no-political-debanking setting.

Which brings us to step four: acceptance of responsibility—or not. Some banks, such as JPMorgan Chase and Citi, seized the opportunity and adopted language suggested by ADF. To Chase’s credit, they had already dropped “social risk” as a factor in their payment system before Trump was elected.

Citi changed its policy, which had debanked a number of perfectly legal firearms transactions, dropped that restriction altogether. We noticed a marked change in tone. The clearly left-aligned staff we had dealt with previously, who justified their gun bans using straight up David Hogg talking points, gave way to government relations professionals who actually knew some Republicans.

Bank of America did not change a thing until quite recently. In fact, as were going to press with this piece, the company informed Charlie Gasparino of the New York Post that it had modified its policies to ensure no debanking over religious viewpoints. Previously they had debanked a missionary organization that serves Ugandan widows and orphans. Not great optics, BoA. Also, not great risk management: The Lord of Hosts sides with the widow and the orphan, and He’s bigger than Biden. BoA also debanked a Tennessee church that supported the mission. It claimed that it did this because the church was a debt collection business. It is not. It is a church. Yes, at some point the separate missionary organization referred some people for job training to another business that included credit counseling, but that is three degrees of separation away from the church. But BoA did, eventually, fix this, so credit due.

What most readers can do is to make sure your money is not being weaponized against us. Typically, proposals that fight debanking get less than 5% support. That means that there is roughly a 95% probability that the money you have in your IRA or 401(k) is siding with the banks. It does not matter if your financial advisor has a fish on his card. By and large, financial advisors vote with the herd and don’t even know it. A few are on top of this, but very few. Ask how your money is being voted. Ask how the churches and ministries you give money to are voting with that money.

Don’t stop until you get a clear answer.