Elizabeth Warren Urges Trump to Support CFPB Efforts to Fight Debanking

Democratic Senator Elizabeth Warren urged President Donald Trump to work with regulators to stop what she called unjustified closing of bank accounts held by citizens and businesses, arguing that efforts to mute the Consumer Financial Protection Bureau will worsen the problem.

In a letter to Trump, Warren asked the new administration to support the CFPB in its efforts to prevent so-called debanking. The Trump administration has named Scott Bessent as the CFPB’s acting head after firing director Rohit Chopra. Bessent has instructed CFPB staff to halt some activities.

Warren, writing ahead of a Senate Banking Committee hearing on Wednesday, said the issue was bipartisan and highlighted Trump’s recent public rebuke of Bank of America Corp. Chief Executive Officer Brian Moynihan. At the World Economic Forum in Davos, Trump accused the lender of limiting business with certain clients and also called out Jamie Dimon, CEO of JPMorgan Chase & Co., for the same alleged treatment of conservative customers.

“There are times when a bank has a legitimate reason, and a legal obligation, to freeze or close a bank account,” Warren wrote in the letter, dated Feb. 4. “But banks may be implementing these legal obligations in a sloppy and overbroad manner to cut costs.”

At the Senate committee hearing Wednesday, Anchorage Digital CEO Nathan McCauley testified that he had been the victim of debanking, though he declined to name the lender. McCauley said the bank told Anchorage in 2023 that it would be closing the firm’s accounts because it was uncomfortable with Anchorage’s crypto clients.

“They refused to provide further explanation or allow us to speak with a risk-management team,” McCauley said. “We had extreme difficulty finding new banking partners. We spoke to about 40 banks across the country and were rejected by all of them, many telling us they had a blanket policy against serving crypto clients.”

Consumers have been locked out of the financial system due to overdraft fees, religious affiliations or political beliefs, according to Warren. She also released findings from analysis of more than 8,000 complaints from consumers who allege their bank accounts were improperly closed in the last three years. She said the highest volume of complaints were lodged against the four largest banks: Bank of America, JPMorgan, Wells Fargo & Co. and Citigroup Inc.Each of those banks handles millions of customer accounts.

Representatives for Bank of America, Wells Fargo, Citigroup and JPMorgan declined to or didn’t immediately respond to requests for comment.

Managing Risks

“Banks are required to manage risk and satisfy their regulators, which can also restrict banks from sharing why an account has been closed,” a spokesman for the Bank Policy Institute, which represents the banking industry, said in an emailed statement. “An important part of the solution is fixing the regulatory structure.”

Banks have been criticized for closing customer accounts for unexplained reasons. In response, they say they don’t discriminate against customers on the basis of their religion or political beliefs. They are also required by law to report suspicious activity to regulators to prevent money-laundering.

That can place them in a difficult position when it comes to providing widespread access to banking services, according to a report last month by the Congressional Research Service.

“Increased deposit funding and loan revenue are considered healthy financial activities for banks,” according to the report. “However, some customers could make it more difficult for banks to comply with certain bank laws, such as the Bank Secrecy Act.”

Warren said she was willing to work with the Trump administration on legislation that codifies the right to a bank account, sets disclosure rules and institutes an appeals process if an account is closed. She also said penalties on large banks that “unlawfully infringe upon people’s right to a bank account” should increase.

Other financial regulators, such as the US Department of the Treasury, the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, could also use their authority to address debanking, Warren said. Those agencies should review anti-money-laundering and other regulatory frameworks to prevent unjustified debanking.