Public perceptions shaped banks' client decisions: OCC report

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• Key insight: The OCC found reputational-risk assessments shaped banks' decisions to serve certain customers and industries, but the agency could not comprehensively quantify the scale of, or cost imposed by debanking customers. 

• Supporting data: The review covered nine large banks, more than 100,000 complaints, hundreds of individual customer decisions and approximately 420,000 pages of documents.

The Office of the Comptroller of the Currency found that the nine largest OCC-supervised banks strongly aimed to minimize damage to their public standing when deciding to do business with certain individuals and industries. In the "debanking" report released Wednesday,  however, the agency could not comprehensively quantify the extent of politically motivated or the financial harm to affected customers.
"[The nine] banks spent considerable time discussing potential impacts to customer loyalty, the views of government entities — including the banks' own regulators — the risks of shareholder petitions, and opinions of advocacy groups on both sides of the political spectrum," the report noted. "The OCC was unable to quantify on a comprehensive basis the full extent of debanking or alleged debanking actions or the costs to customers and prospective customers."

The report follows President Donald Trump's August 2025 executive order that directed banking regulators to examine financial institutions for any internal policies that encourage debanking — that is, when a bank unilaterally cuts ties with a customer — based on a customer's religious or political affiliations. 

The OCC reviewed over 100,000 complaints, hundreds of individual customer decisions and approximately 420,000 pages of bank documents from Bank of America, BMO, Capital One, Citibank, JPMorgan Chase, PNC, TD Bank, U.S. Bank and Wells Fargo. The review covered policies and practices in place between 2020 and September 2025.

Subjective assessments, the agency said, could leave ordinary customers vulnerable to account closures while allowing banks to accommodate more lucrative relationships facing significant reputational concerns.

In one instance, JPMorgan Chase's payment-processing subsidiary, WePay, closed the account of a merchant selling Trump and his Make America Great Again brand merchandise in February 2021, shortly after the January 6 insurrection, for violating its policies by promoting hate, violence or racial intolerance. 

In another case, employees at JPMorgan suggested ending a relationship with a religious nonprofit they described internally as a "right wing religious conservative non profit with strong anti LGBTQ rhetoric." 

In 2022, U.S. Bank closed two deposit accounts belonging to a small aviation company that had banked with the institution for more than a decade after employees discovered an old report alleging that the company had cooperated with the government in a controversial program.

The OCC did not name the aviation company, but the description resembles a controversy in the aughts related to Aero Contractors, a North Carolina-based firm whose aircraft were used in the CIA's post-9/11 extraordinary rendition program. A 2018 report by the North Carolina Commission of Inquiry on Torture documented the company's role in transporting detainees to CIA "black sites." The OCC report says the bank's decision to close the aviation company's accounts followed a years-old citizen-led commission report alleging the company had cooperated with a controversial federal program.

The report also highlighted disparities in how banks treated customers facing negative publicity. JPMorgan retained a high-net-worth individual whose drug and weapons charges had resulted in a criminal plea deal. The report states the customer's ability to bring additional funds into the bank also appeared to have influenced the decision.

"JPMorgan evaluated the risks associated with a high-net-worth individual in a profession with high visibility in the news in connection with drug and weapons charges that resulted in a criminal plea deal," the report noted. "Factors cited as mitigating the negative media included the fact that the plea deal involved a lesser felony than originally charged and that the felony could be reduced to a misdemeanor upon successful completion of the plea deal terms."

While the OCC did not identify the individual, the scenario OCC says raises questions about whether banks consistently weigh reputational concerns when serving high-profile customers. Hunter Biden, son of former President Joe Biden, for example, banked with JPMorgan and faced extensive public scrutiny over his drug use and criminal cases involving tax and gun charges.

The report also found that banks' decisions about politically sensitive industries evolved with changes in presidential administrations.

In 2024, Wells Fargo employees considering lending to a gun dealer described the business as a "controversial and highly partisan issue," saying that "[u]nder the Biden administration, banks could face greater supervisory pressure to move away from lending to the firearms industry." The bank ultimately declined to pursue the opportunities, citing a lack of potential revenue.

Bank of America offered another example of what the OCC described as a political "whipsaw" effect. The bank had announced that it would stop lending to detention centers and private prisons due to their negative reputations and wound down relationships with several customers in the sector.

The OCC found a senior public-policy leader at the bank explained that it had previously exited one relationship because of "risk associated [with] changing policymaker attitudes." Yet just months into the Trump administration, Bank of America sought to reestablish the relationship.

The OCC also found industry-specific restrictions involving Arctic oil and gas development, coal mining, firearms manufacturing and distribution, detention facilities, digital assets and tobacco products. In some cases, banks conditioned financing on businesses adopting the institutions' preferred environmental or social standards.

The OCC said all nine banks have revised reputation risk policies following the Trump administration's increased scrutiny over alleged debanking. But the OCC questioned whether these changes would prevent the practices from returning, as "[some banks] rebranded the risk as a 'franchise' or 'brand' risk.

"Few, if any, banks would wholly disclaim the potential relevance of reputation risk in making decisions on whether to terminate or deny services to customers or prospective customers," the OCC noted. "Most banks at least left open the possibility that they would consider the risk of financial loss of banking or retaining a customer based on the perception of that customer by, for example, their shareholders or other customers in making decisions."

"No bank has fully and publicly acknowledged its past debanking decisions," the OCC continued. 

The agency also said it would continue examining whether anti-money-laundering requirements under the Bank Secrecy Act have contributed to debanking.

"The OCC will continue to work with our regulatory partners to further assess the extent to which bank policies implementing money laundering and terrorist financing program requirements have contributed to debanking and will take appropriate action as needed," the rapport noted.  "These efforts could include, for example, additional guidance clarifying the risk-based application of BSA requirements to categories of customers or specific business activities, additional reforms to reinforce the OCC's risk-based approach to BSA supervision, or potential regulatory or supervisory changes to prevent pretextual reliance on the BSA for account terminations unrelated to legitimate money laundering or terrorist financing concerns."

The Bank Policy Institute, which represents large banks, said the industry supports encouraging customers to have fair access to banking and upholding clear standards that allow institutions to serve law-abiding customers while maintaining sound risk management.

"We support efforts to establish clear and consistent standards that promote access while maintaining sound risk management, including the administration's recent efforts to prioritize supervisory attention on material financial risk and rather than reputational risk," BPI wrote in a statement following the report's publication. "We look forward to continued engagement with the administration and Congress as they consider additional proposals that ensure that political or religious beliefs do not unfairly affect customers' access to banking services."