Citing President Trump’s Executive Order, the SBA has sent letters to its network of more than 5,000 lenders instructing them to end what the Trump Administration said is politicized or unlawful debanking.
The SBA is requiring all lenders to stop debanking and reinstate qualified customers who were denied services on the basis of political, religious or ideological beliefs. “Lenders who fail to comply with these directives will lose their good standing with the SBA and will be subject to additional punitive measures,” the SBA said.
“Since the Obama Administration, financial institutions have – both independently and at the direction of federal regulators – weaponized the banking system against Americans who refused to bend the knee to a partisan ideology,” SBA Administrator Kelly Loeffler said. “Access to banking should not be a partisan issue – but far too many confirmed debanking cases have targeted right-leaning businesses, non-profits, and people – including Christian, pro-life, and Second Amendment organizations.”
On August 7, President Trump signed an Executive Order, “Guaranteeing Fair Banking for All Americans.” This sweeping action prohibits financial institutions of any size from denying services to individuals or businesses based on political or religious beliefs, orientation, or lawful industry involvement.
The SBA said that both the Obama and Biden Administrations pressured financial institutions to engage in debanking. The agency cited the Obama Administration’s “Operation Chokepoint,” a program that it said pressured lenders to debank gun manufacturers and other “politically disfavored” but legal entities. The administration said that there are myriad examples of groups being debanked under the guise of “reputational risk.” The SBA said that even Trump has been debanked by numerous institutions that refused to accept his deposits or closed his accounts.
At the same time, many of the same institutions were encouraged to increase services to politically left-leaning political causes, according to the agency. The Biden Administration pushed SBA loan programs to favor “green energy,” the SBA said.
The SBA directed lenders to take action by December 5, 2025. Those actions are to:
- Identify any past or current policies that influence their institutions to engage in politicized debanking as outlined in Trump’s Executive Order.
- Make reasonable efforts to identify and reinstate clients of their institutions who were denied services due to debanking.
- Identify all potential clients denied access to financial services due to debanking.
- Identify all potential clients denied access to payment processing through a politicized debanking action.
Lenders must submit a report to the SBA by January 5, 2026, providing evidence of their compliance with the directives to remain in good standing with the agency and avoid punitive measures.
For financial institutions, regulators, compliance professionals, and their customers, the debanking stakes could not be higher.
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