“Debanking” and the Punishment of the Speech of Politically Disfavored Groups

​We recently covered the plight of Sam Brownback – former Kansas governor, U.S. Senator, and ambassador – who learned that the Chase Bank account for the non-profit he heads, the National Committee for Religious Freedom, had been closed with no explanation. In a lengthy back-and-forth with Chase Bank, Brownback learned that he had been defined in regulatory filings as a “politically exposed person.”
 
Allysia Finley in The Wall Street Journal explains the mechanisms behind these actions. She covers the widespread and growing practice of federal agencies’ use of the Bank Secrecy Act to surveil and punish the speech of law-abiding but politically disfavored groups through “debanking.”
 
These Orwellian acts don’t originate with the banks. The banks themselves face penalties that can go into the billions of dollars if they fail to close an account for a customer who is the target of numerous “Suspicious Activity Reports” (SARs), which flag them as “high risk.” Last year, banks filed 4.6 million SARS. Who knows how many customers were debanked as a result? 
 
Victims include former First Lady Melania Trump, and groups targeted by some in government such as firearms dealers, payday lenders, and pawn shops. Now the provision has blocked the Blockchain Association, a trade group for the cryptocurrency industry. Barney Frank, a former Chair of the House Financial Services Committee, says that the FDIC seizes banks “to send a message to get people away from crypto.”
 
Think about that for a moment. The banks were forced not to go after crypto accounts, some of which admittedly could be sketchy, but to go after a trade association (“the collective voice of the crypto industry”) that exercises its First Amendment right to petition the government to argue for pro-crypto legislation.
 
Unraveling the practice of silencing people and organizations by snapping their accounts shut should be high on the list for reform by the incoming Trump administration and the next Congress.

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