by Jake Pearson ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up to receive our biggest stories as soon as theyre published. Last month, when President Donald Trump signed an executive order guaranteeing fair banking for all Americans, he served notice of a coming federal crackdown.Banks who have denied customers access to accounts, loans or credit cards on the basis of political or religious beliefs or lawful business activities, he said, would now feel the full force of government regulators. Violators could find themselves facing fines, consent decrees or other disciplinary measures in an effort to stamp out politicized or unlawful debanking.The cause hits close to home for the president, whose family business sued Capital One earlier this year, alleging, without providing evidence, that hundreds of its accounts were closed in the summer of 2021 as a result of political discrimination.Even so, the administration may find it difficult to enforce the presidents order for one simple reason: Seven months of aggressive cost-cutting and government downsizing has left the Consumer Financial Protection Bureau, one of the primary regulators that Trump tasked with carrying out his banking directive, a shell of an agency.In fact, CFPB leaders appointed by the president are awaiting final court approval to fire the majority of the bureaus remaining staffers, a move that would leave just a skeleton crew in place and likely end dozens of investigations into alleged corporate malfeasance. Since February, most staffers have been under a stop-work order that has effectively stalled the bulk of its probes including ones into debanking. Among them are investigations into why JPMorgan Chase and Citibank freeze and close bank accounts, respectively, according to people familiar with the matters. Work was also suspended on inquiries into whether two little-known companies that banks use to screen prospective customers have wrongly flagged some as too risky to serve, said the people, who spoke on condition of anonymity because they were not authorized to discuss sensitive matters.Court records show that one of those firms, Regulatory DataCorp, provides reports on customers to Capital One the very financial institution that Trumps family business has accused of debanking. (A Capital One spokesperson declined to comment, but the bank has disputed the Trump businesss claims of political discrimination and moved to dismiss its lawsuit, writing in court papers that it was false that the bank closed Trump accounts because it disagreed with the presidents views.)In dismantling the CFPB, the Trump administration has portrayed the agency as an industry antagonist and an example of government overreach. But Luke Herrine, a consumer law expert at the University of Alabama School of Law, said that Trump officials, in their haste to shrink the federal bureaucracy, didnt really consider whether there were some aspects of the CFPB that might be useful for their projects and what they might have to do to preserve them.In fact, days before he was sacked by the Trump administration, then-CFPB head Rohit Chopra told a gathering of the conservative Federalist Society that the government needed to do more on debanking and advocated for due process rights for customers as well as more real, clear, bright-line prohibitions on what information banks can use in deciding to freeze or close accounts. The White House did not respond to a request for comment. To be sure, Trumps executive order directs a host of regulatory agencies to take action, and some of them, such as the Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency, have already begun making changes to their bank examination processes to address the presidents concerns. But the CFPB is the only one that is specifically charged with protecting consumers, hundreds of whom file complaints each month alleging theyve been denied access to the financial system. A spokesperson for the CFPB didnt respond to an email and call seeking comment. But a recent decision by the agency sheds some light on how bureau officials may be interpreting Trumps order.Last month, the CFPB cited the order as it dropped a Biden-era probe into a company that provided loans for customers to buy firearms and pets, saying the investigation was politically motivated; the services were marketed to conservatives and Donald Trump Jr. was a board member of the firms parent company. Though the company had previously reached deals with regulators in California and Massachusetts over its lending practices, the CFPBs chief legal officer wrote in a recent letter that the case represents precisely the kind of unconstitutional targeting barred by Trumps debanking directive.Banks make decisions about who to serve based on a number of factors, including the financial and reputational risks of doing business. They also must follow laws and rules requiring them to know their customers and prevent money laundering.But leaders in both political parties agree that Americans are sometimes unfairly denied credit or accounts by big financial institutions. The issue became something of a cause celebre in Republican circles after former President Barack Obamas Department of Justice launched a crackdown on unscrupulous payday lenders and other high-risk businesses, in part by urging the payment processors and banks that provide those enterprises access to the financial system to be more diligent in looking for signs of fraud. The former president of the American Bankers Association asserted that the program was compelling banks to deny service to unpopular but perfectly legal industries by threatening penalties, a message that Republicans amplified as an example of Obama-era government overreach. Their argument gained steam when the firearms industry discovered its retailers had been listed as a high-risk merchant in an obscure FDIC newsletter, according to Dru Stevenson, a professor at South Texas College of Law Houston, who has written that the whole affair has taken on symbolic and mythic proportions in partisan discourse about regulation. Many conservative activists and party leaders now claim that some Republicans are being rejected as customers because of their politics and even at the behest of government regulators. No evidence has emerged to support the claim and indeed, as Reuters recently reported, just 35 of the 8,361 detailed complaints filed with the CFPB about closed bank accounts since 2012 included terms such as politics, conservative or Christian. Complaints of discrimination are also increasingly leveled by cryptocurrency entrepreneurs, many of whom backed Trumps presidential campaign. Their narrative gained traction in 2023 when regulators warned banks about the risks associated with digital assets, an act some in the crypto industry billed as a revival of the Obama-era crackdown.Getting a sense of the scope of debanking was in part what the CFPB was exploring in its inquiries when Trump took office in January, the people familiar with them said. At JPMorgan, for example, about a million customers accounts are frozen each year, they said, though the justification for doing so varies and in many cases its done in response to fraud. The CFPB investigations into Regulatory DataCorp and another screening company, LSEG World-Check, were looking in part into whether customers had been denied accounts or had seen their accounts closed after the companies wrongly flagged them as problematic, generating false positives or outright mistakes in dossiers compiled by analyzing vast news and public records databases, the people said. The CFPB had issued subpoenas in its inquiries, which were still in the early stages, said the people familiar with the probes.A company spokesperson for World-Check said we have not understood World Check to be under review by any agency for potential denial of credit. A spokesperson for Moodys, which acquired Regulatory DataCorp in 2020, didnt return a call and email. A JPMorgan spokesperson said the bank wasnt aware of the CFPB investigating so-called politicized debanking, as it is discussed in the recent Executive Order and Citibank declined to comment. In a statement released after Trump issued his executive order, a coalition of bank industry groups said the directive would ensure all consumers and businesses are treated fairly, a goal the nations banks share with the Administration but one that hasnt been met because regulatory overreach, supervisory discretion and a maze of obscure rules have stood in the way. Part of the problem is that the whole debanking process is cloaked in secrecy, since financial institutions are subject to a constellation of regulations and laws including one called the Bank Secrecy Act that require them to refer potentially suspicious activity to the Treasury Department in confidential reports they cant talk about. That can be frustrating for customers who are not told why theyre being cut off and it provides an opportunity for outsiders to offer their own conclusions, experts said. Whats more, international best practices counsel financial institutions to give people in high-profile positions, who are called politically exposed persons, along with their immediate family members and associates, an extra due-diligence scrub since they are deemed more susceptible to bribery or corruption. A 2023 New York Times series exploring debanking documented various instances in which banks flagged what turned out to be benign transactions as unusual, freezing accounts for fear of not complying with various rules that bar financial institutions from facilitating money laundering, terrorism or fraud.Banks have expressed a desire for more clarity from their regulators on when they should boot customers and whether they can provide more information about the reasoning behind their decision.As it stands, banks tell affected customers little to nothing. In that vacuum, Republicans have often ascribed political bias as the motivation without providing concrete evidence to back it up, said Stevenson, the debanking expert.Ironically, the Trump administration quashed an effort that could have shed more light on debanking when it abandoned a legal case earlier this year. Under former President Joe Biden, the CFPB had sought to amend its exam manual to give its bank examiners more leeway to scrutinize financial institutions for potentially discriminatory practices, court records show. The Chamber of Commerce and other industry groups sued and a district court blocked the agency from doing so, arguing the bureau had exceeded its authority. The Biden-era CFPB appealed that ruling, but the Trump administration dropped the case before it was decided.