New Orleans I’m not a fan of President Trump. Any reader or listener knows that’s the case. When he’s wrong or whack, I don’t mind saying so. That doesn’t mean that like a broken clock that he might not be right every once in a while. I have to admit that I think he’s right on his efforts to end what he has termed “de-banking.” In his standard MO, he issued yet another executive order on this subject in recent days. Again, this is more a matter for Congress than the White House, but those are just the details, as usual.
What is this de-banking thing? Some Democrats have labeled it as just a “personal issue” for Trump. It’s much more than that, but I understand why some might say so, because, as usual, Trump has made too much of this about him. Seems Capital One bounced his accounts after January 6th and he claims other banks wouldn’t take a billion dollars of his deposits. A Wall Street Journal editorial makes me uncomfortable saying “Trump is Right on ‘De-Banking’” making me have another strange bedfellow feeling, but they cite instances of tech, crypto, and other folks having been debanked as well.
It’s more than another Trump grievance, and if politicians had been paying attention, it’s a problem for many people. The Times has run stories on small businesses suddenly and inexplicably finding their accounts closed. The issue had enough resonance with readers that their financial advice columnist some months later wrote an entire column advising folks on what you could do not to suddenly have your account closed. That piece even included this bizarre preventive measure:
If you must use checks, don’t mail them. And if you have to mail a check, try taking it directly to a post office.
In short, if this is a personal issue, then it fits in the category of what famed sociologist C. Wright Mills in his definition of dialectic politics called the process in which a personal problem becomes a political issue.
The excuse banks offer is that they do this to prevent “reputational risks,” and, yes, since with merit banks can sometimes be classified as “criminal enterprises,” the notion that they have reputations that can even be risked is a paradox. They hide behind the fact that federal banking examiners tasked with stopping money laundering and fraud have pushed them in the direction of letting their algorithms go crazy on people’s personal and business accounts. They also hide behind various secrecy acts to explain why they don’t believe they have to give any reasons or allow customers to make any appeals on this level.
Unfortunately, keeping money under the mattress is not a good way for individuals or businesses to operate in modern life, so having a banking account of some kind is virtually a public utility administered by banks as if it represents a privilege. This is not just a conservative issue. Progressives are equally at risk. I know this firsthand, having been bounced out of personal and business accounts we had had for 30 years, and in our case finding succor at Capital One, but only because they had been our strongest supporter after Katrina and one of their lawyers was known well by me so that by happenstance he connected me to an officer willing to take the risk, giving us a home for the last several decades. Senator Elizabeth Warren, the scourge of banks, admits that “banks may be taking shortcuts when it comes to assessing risks,” and are not doing the work to nab “true criminal risks.”
Enough said, having a bank account should not be subject to political winds and weather changes. Trump may be doing the right thing for the wrong reason, but Congress needs to clean this out to protect the innocent, while holding banks to account at the same time.