In recent years, “debanking” has emerged as a significant issue within the financial services industry. “Debanking” refers to the termination of or refusal to provide financial services to certain individuals, businesses or entire commercial sectors. As debanking becomes an increasingly public concern, federal and state governments are introducing new legislation and regulations to address the perceived problem of financial exclusion.

The Rise of Debanking

Debanking primarily impacts businesses and individuals in high-risk sectors such as cryptocurrency, money transfer operators and even politically affiliated enterprises. Financial institutions rely on the denial of financial services as a measure to mitigate financial crimes like money laundering, fraud or terrorist financing and protect against financial risk. Banks are required by regulators to conduct thorough customer due diligence, often leading them to close accounts they perceive as risky or non-compliant with regulatory requirements.

While these measures are intended to protect financial systems, public concern has begun to grow around the transparency and accountability related to “debanking” practices. Critics argue that debanking is often arbitrary and discriminatory, with businesses and individuals suffering from arbitrary decisions that hinder their ability to access essential financial services. 

Legislative Response: Florida Unsafe and Unsound Practices

As “debanking” practices become more widespread, legislators have introduced legislation to address public concern and protect access to financial services. One example is the Florida Unsafe and Unsound Practices Statute, effective July 1, 2023, which was designed to ensure that individuals and businesses are not unfairly excluded from the banking system. FLA. STAT. § 655.0323. This statute specifically addresses debanking in the state of Florida and aims to provide a legal framework for individuals and entities who believe they have been unfairly denied banking services.

Under Section 655.0323, financial institutions in Florida are prohibited from denying, canceling, suspending or terminating services to an individual or business or otherwise discriminate against a person in making such services available on the basis of (i) the person’s political opinions, speech or affiliations; (ii) the person’s religious beliefs, exercise or affiliations; (iii) any factor if it is not quantitative, impartial and a risk‑based standard, including factors related to the person’s business sector; or (iv) the use of any rating, scoring, analysis, tabulation or action that considers a social credit score.

To provide accountability under the debanking statute, Florida financial institutions are subject to a complaint system, allowing customers to file complaints for alleged breaches of the anti-discrimination guidelines. Unresolved violations of the law result in a breach of Florida’s Deceptive and Unfair Trade Practices Act, which can carry sanctions and fiscal penalties. In addition to responding to customer complaints, financial institutions are also required to annually attest, under penalty of perjury, whether the entity is acting in compliance with Section 655.0323. 

Access to Financial Services as a Public Utility

Federal regulators are also taking steps to address “debanking” and are comparing financial services to public utilities. In a January 2025 speech, former Director of the Consumer Financial Protection Bureau (CFPB) Rohit Chopra contended that bank accounts are an essential service and should be regulated more like a public utility with a baseline expectation of universal access. The former director noted that bankers “should only have the ability to [close accounts] when there is some reasonable business justification or a very clear law or regulation that they are following.” The former CFPB director suggested revisiting the 2020 fair access rule proposed by the Office of the Comptroller of the Currency (OCC), which requires large banks to provide support for denial of loans or other services to politically sensitive businesses with “objective, qualitative and individualized” risk assessments. Mr. Chopra noted that although the OCC’s fair access rule had some problems, it would be a good start in addressing “debanking.” He encouraged lawmakers to review common‑carrier laws to see if these laws may apply to banking and payments. He also promoted requiring banks to provide adverse action notices to customers when closing an account, noting that the anti-fraud analytics and algorithms used to trigger account closure are opaque and require more transparency. He advocated for “bright line” prohibitions on using characteristics like political or religious views to make account closing determinations, which would be similar to the Florida Unsafe and Unsound Practices Statute.

Although banks already comply with the Equal Credit Opportunity Act and the Fair Housing Act, financial services outside of credit transactions have not faced the same level of anti‑discriminatory regulation. Treating financial services as a public utility and the broad implementation of legislation similar to Florida’s Unsafe and Unsound Practices Statute, however, could restrict financial institutions’ ability to manage risk while remaining profitable for shareholders. This new focus on transparency and accountability as it relates to the comprehensive scope of financial services may increase the administrative cost of providing such services.

President Donald Trump alleged that Bank of America and JPMorgan Chase have “debanked” conservative customers. “Debanking” will likely be a priority for the Trump Administration. The president also emphasized in a recent Executive Order that “protecting and promoting fair and open access to banking services for all law-abiding individual citizens and private-sector entities alike” is administration policy. Policy makers in West Virginia will most likely follow suit.

The banking industry should continue to monitor any “debanking” legislation proposed in West Virginia and by any federal banking regulators.