“Don’t blame us!”
That’s what the big banks are telling On The Money following comments President Donald Trump made last week to the globalist crowd in Davos, Switzerland.
A couple of globalist bankers, Jamie Dimon, who runs JPMorgan, and his counterpart, Brian Moynihan of Bank of America, are “debanking” — or denying bank services — to conservatives, crypto enthusiasts and other industries deemed politically sensitive.
Or as The Donald put it: “And I don’t know if the regulators mandated that because of Biden or what,” Trump said, calling into the World Economic Forum confab and addressing a gobsmacked Moynihan who was in attendance, “but you and Jamie and everybody – I hope you’re going to open your banks to conservatives, because what you’re doing is wrong.”
Let’s just say Moynihan didn’t see that coming and tried to change the subject with some gibberish about BofA’s sponsorship of the World Cup. Neither did Dimon, who wasn’t in the crowd, but got an earful from his PR staff about Trump’s broadside.
When the dust settled, and your friendly reporter (who was in Davos) began to unspool Trump’s charges, here’s how the bank’s explained this sordid tale.
Yes, people are being canceled, and “debanked,” executives at the big banks conceded. But that’s only because of the stringent regulations currently in place that forced them to do so.
It all began around 10 years ago during the Obama administration, with the former president, famous for bringing progressive hope and change. He began the crackdown on banks over whom they did business with, nominally looking to debank money launderers but also focusing on politically incorrect industries like gun manufacturers.
Obama’s massive fines, if they missed a money launderer or two, forced an over-reaction, these bankers tell me. And yes conservatives were caught in this crossfire given Obama’s obsession with right-wing extremism, the bankers say.
The crackdown took a bit of a break during Trump I, but it was back with a vengeance under Biden, who directed his administrative state to clamp down even more. Biden’s war on crypto, critics alleged, went beyond regulation by enforcement from the Securities and Exchange Commission to include de-banking. The banks began to cancel accounts that contained any whiff of illegality, or controversy, real or imagined, I am told.
“Why take the chance?” one rep from a big bank told me. “we can be fined to death.”
According to some terrific reporting from Fox Businesses’ Eleanor Terrett, the people who fell under the microscope seemed to follow a familiar pattern: They were associated with right-leaning groups, or the ultimate bogeyman during the Biden years, players in the $3.5 trillion crypto business. Terrett also reports that next week both the House Financial Services Committee and the Senate Banking Committee will hold hearings to get to the bottom of this mess.
Meanwhile, banks say they welcome the scrutiny since it all stems from regulation that Biden imposed through places like the semi-independent Federal Reserve, the Office of the Comptroller of the Currency, and the Treasury Department.
Terrett reports that banks are particularly stoked that Trump promises to relax regulations for dealing with crypto customers, a potentially huge source of fee income stymied by Biden. Last week, the Trump Securities and Exchange Commission ditched accounting guidance issued by the Bidenistas that deterred banks from being custodians of crypto.
“This was punitive accounting on the part of the SEC staff,” Jim Kroeker, the former vice chair of the Financial Accounting Standard Board and formerly the SEC’s chief accountant told Terrett. “It created a new and unique accounting model for crypto custody arrangements without going through due process.”
An SEC spokesperson said: “This common-sense change means that companies will no longer be penalized for offering crypto custody services.”
Gensler, who went back to his pre SEC gig as a professor at MIT, didn’t return a request for comment.
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