Key insights
- The US Justice Department has subpoenaed major banks regarding alleged political 'debanking.' This investigation into account closures could signal increased regulatory scrutiny and potential legal risks for financial institutions, potentially impacting investor sentiment and operational costs. While the direct market impact is uncertain, it adds a layer of uncertainty to the banking sector.
June 10 (Reuters) - The U.S. Justice Department has issued subpoenas to major banks, including JPMorgan Chase and Bank of America, seeking information on whether they improperly closed customer accounts for political reasons, according to a person familiar with the matter.
The subpoenas, some dating back to last year, were from the U.S. Attorney’s Office in Washington, D.C., headed by Jeanine Pirro. The Wall Street Journal first reported the subpoenas.
They requested banks to provide lists of individuals who were allegedly "debanked," along with details explaining why their accounts were closed, the report said.
Pirro’s office is also seeking information from Wells Fargo, the report added, citing people familiar with the matter.
JPMorgan did not immediately respond to Reuters’ request for comment. Bank of America and Wells Fargo declined to comment.
The reported subpoenas add to President Donald Trump’s pressure on major banks and their regulators. Last year, he signed an executive order directing the industry to ensure it was not denying financial services to some controversial industries in a practice commonly described as "debanking."
The Office of the Comptroller of the Currency had found in a review last year that the nine largest U.S. banks had in the past placed restrictions on providing financial services.
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