Bank of America scraps rule that sparked debanking of conservative religious groups

Bank of America (BofA) has quietly dropped a contentious rule that critics say enabled the “debanking” of conservative religious organizations and businesses. The policy shift marks the end of a years-long dispute over whether financial institutions could deny services to clients based on their religious viewpoints. For BofA, the reversal comes amid political and public pressure after the bank held out longer than most of its peers.

‘Debanking’

BofA CEO Brian Moynihan, alongside JPMorgan Chase CEO Jamie Dimon, previously faced sharp criticism from President Donald Trump. Trump accused both banks of denying him services following his first term in 2021. Insiders alleged the Biden administration pressured banks to distance themselves from Trump after the January 6 Capitol riots. At the time, financial institutions relied on a “reputational risk” clause in federal regulations that allowed them to refuse clients deemed controversial. Evangelical groups, in particular, were also affected by a widely used “viewpoint” rule across the industry. The provision permitted banks to cancel services to organizations opposing progressive cultural norms such as same-gender marriage, framing those stances as hate speech.

Bank of America amends position

While JPMorgan and other major banks abandoned the viewpoint rule in 2023 following legal and activist challenges, Bank of America remained the sole holdout until late June. The bank has now amended its code of conduct to explicitly prohibit discrimination based on religious viewpoint. “While we have been very clear that politics is not a factor in our decisions, we received thoughtful input from a range of stakeholders and agreed it is best to explicitly add that to our Code of Conduct,” a BofA spokesman said. “Religious views are not a factor in any account closing decision. Bank of America is proud to provide services to about 120,000 non-profits associated with religious organizations around the country.” JPMorgan, for its part, has emphasized its stance against viewpoint discrimination. Its 2023 shareholder letter stated, “We have not turned away — and will not turn away — customers because of their political or religious affiliations.”

Trump’s battle against debanking

As many as 12 banks rejected Trump shortly after his presidency ended. Other businesses tied to the MAGA movement, along with some in sectors like cryptocurrency, said they too experienced debanking. BofA’s reversal follows an executive order recently signed by Trump, which bans banks from cutting off clients over political or cultural considerations. But the decision also represents a significant win for Jerry Bowyer, CEO of Bowyer Research.

BofA’s practice

Bowyer has campaigned since 2022 to encourage banks to distance themselves from left-leaning political practices, particularly targeting religious discrimination through banking practices. He previously secured a shareholder vote on the JPMorgan ballot in 2023 to end viewpoint debanking. Although he lost, the effort sparked a conversation that ultimately led to JPMorgan’s policy change. He said he first learned of BofA’s practice when the bank closed accounts linked to a Tennessee evangelical church, citing ties to a debt collection business in Uganda. The church countered that it was helping locals find employment. “We met with them several times about this and asked them to change the language, and they refused; they just blew us off,” Bowyer recalled. When informed that BofA had recently amended its policy, he responded, “Better late than never.”

The post Bank of America scraps rule that sparked debanking of conservative religious groups appeared first on Knewz.