The Small Business Administration yesterday announced it had ordered its network of more than 5,000 lenders to end any practices that result in “debanking,” adding that lenders who failed to comply will “lose their good standing with the SBA and will be subject to additional punitive measures.”
President Trump earlier this month issued an executive order directing federal agencies to investigate whether banks and credit unions denied services to customers because of their political or religious beliefs or because they were engaged in certain business activities, such as cryptocurrency. SBA lending was singled out in the executive order.
The SBA is directing lenders to take action to identify and rectify past debanking – including reinstating services to clients who were allegedly debanked – by Dec. 5 and submit a report of their findings by Jan. 5, 2026.
In response to Trump’s executive order, the American Bankers Association and three banking associations in issuing a joint statement that identified several ongoing legislative and regulatory efforts that align with the order’s goals, such as bills to eliminate reputational risk from bank supervision and to establish a fair process for banks to appeal supervisory decisions. They also provided a list of principles that should guide policymakers as they seek to address debanking caused by regulatory overreach and supervisory pressure.
“It’s in banks’ best interest to take deposits, lend to and support as many customers as possible,” the associations said. “Unfortunately, regulatory overreach, supervisory discretion and a maze of obscure rules have stood in the way as the [order] makes clear. We thank the administration for its efforts to protect access to banking and rein in runaway regulations and look forward to working with the White House, Congress and the agencies to create a national standard that advances these goals.”
