Cato Institute analyst Nicholas Anthony argues the US Congress needs to reform the Bank Secrecy Act, repeal confidentiality laws and end reputational risk regulation to address debanking.
The majority of debanking cases in the US are a result of government pressure, rather than individual banks’ policies, according to a new report from the American think tank the Cato Institute.
Cato Institute analyst Nicholas Anthony explained in a report on Thursday that debanking could take several forms: religious or political, the idea that a financial institution closes accounts solely due to political or religious belief or affiliation; operational, when a bank chooses to close a customer’s account as it’s no longer in the bank’s interest; or government, when a government pressures a financial institution to close a customer’s account.
“While media and political narratives often attribute these closures to political or religious discrimination, this study finds that the majority of debanking cases stem from governmental pressure,” he said.
