The Small Business Administration has released a form that smaller financial institutions – those with less than $30 billion in assets – can use to demonstrate compliance with a recent order directing lenders to identify past “debanking” actions.
President Trump in August 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. In response, the SBA ordered 5,000 lenders – those institutions with active SBA accounts – to identify any “debanking” practices and previous or potential clients that were denied access to financial services through a “politicized or unlawful debanking action.” Lenders who fail to comply will “lose their good standing with the SBA and will be subject to additional punitive measures.”
In a Sept. 30 letter to financial institutions, the SBA said that to ensure that community banks and other small lenders “continue to focus their limited resources on lending in their communities and other community banking activities,” it is releasing a form that institutions with less than $30 billion in assets can use to demonstrate their compliance with the order, as long as they are also supervised by any of the Federal banking regulators.
Institutions utilizing the form must first identify any “debanking policies” it has in place by conducting a review over the past five years for any state or federal banking agency notices of debanking it has received, identify any reports its board of directors or senior management has received alleging the bank engaged in “politicized or unlawful debanking,” and identify any policies or practices that influenced the institution to engage in “politicized or unlawful debanking.”
The form states that the institution has engaged “in a reasonable review to identify debanking policies” in the past five years. If any debanking policies were identified, the document provides instructions on how the institution should identify the policy, list any “debanking” actions it took under the policy, and list actions it took to address the issue.
The form and any supplementary information must be submitted to the SBA by Jan. 5, 2026.
