President Donald Trump has signed a new executive order targeting the practice known as “debanking,” which has become a hotly debated issue in the financial sector. The order, titled “Guaranteeing Fair Banking for All Americans,” directs federal financial regulators to take action against banks and financial institutions that discriminate against individuals, businesses, or industries due to political or religious beliefs.

The executive order mandates that agencies overseeing banks, credit unions, and other financial entities investigate cases where account closures or service denials may have been influenced by political factors rather than objective business risk. This includes sectors like gun manufacturers and cryptocurrency firms, which have often faced scrutiny and service denials from major banks.

Under this new policy, regulators are required to thoroughly examine complaints and refer instances of alleged politicized debanking to the Department of Justice within 120 days. The order covers a broader range of financial service providers compared to previous regulations, emphasizing that decisions should be risk-based and not motivated by ideology or reputation concerns.

Banks and their trade groups have historically defended their right to choose clients, citing business risk and compliance with laws such as the Equal Credit Opportunity Act. However, the Trump administration argues that politicized debanking threatens fair access to the financial system and could have broader social and economic ramifications.

This move intensifies federal efforts to prevent what is perceived as discriminatory financial practices, signaling increased scrutiny of banks’ reasons for closing accounts or refusing services. Financial institutions must now balance their risk assessments carefully and ensure that all decisions are grounded in legal and financial criteria, rather than external pressure or political considerations. As regulators begin their investigations, this executive order could bring significant changes to how the banking sector interacts with politically sensitive industries and individuals.