Recent Administration Actions Implicating Financial Inclusion Could Impact Financial Institutions

In the absence of active enforcement by federal banking regulators, many financial institutions are choosing this moment to take a second look at their compliance policies and procedures. Recent administrative actions implicating access to financial services may particularly require financial institutions to reevaluate their Consumer Due Diligence (CDD) procedures and Consumer Identification Program (CIP).

Bipartisan Focus on Debanking

Debanking has become a key topic under the new administration. On January 27, President Trump admonished two large financial institutions while speaking at the World Economic Forum, alleging that the institutions had inappropriately debanked accountholders for political reasons.¹ Continuing the emphasis on political debanking, Federal Reserve Chair Jerome Powell testified at a February 11 Senate hearing that the Federal Reserve would remove from its supervision manuals references to reputational risk, the financial risks associated