in effect
This is an executive order (EO 14331, signed August 7, 2025) directing federal bank regulators and the Small Business Administration to stop using “reputation risk” and similar criteria that the order says have been used to pressure banks into denying services based on customers’ political views, religious beliefs, or legal business activities. It also requires regulators and SBA-affiliated lenders to review past decisions and identify customers who were improperly denied service.
Federal banking regulators have 180 days to remove “reputation risk” language from their examiner guidance, manuals, and other non-regulatory materials, and to consider amending existing regulations that could enable politically motivated denials of service. The SBA has 60 days to notify all lenders in its loan-guarantee programs of new requirements, and those lenders then have 120 days to identify and attempt to reinstate clients who were improperly denied banking, loan, or payment-processing services. Federal regulators have 120 days to audit banks under their supervision for past or current policies that encouraged politically motivated denials, and may impose fines, consent decrees, or other penalties on institutions found to have violated applicable law. Within 180 days, regulators must also flag any banks that unlawfully denied services based on religion and, if the institution will not come into compliance, refer the case to the Attorney General for civil action. The Treasury Secretary has 180 days to develop a broader government-wide strategy, including possible legislative recommendations, to address the issue.
Banks, credit unions, and other financial institutions regulated by federal agencies — particularly those that participate in SBA loan-guarantee programs — face new compliance reviews and potential penalties. Individuals or businesses that believe they were previously denied accounts, loans, or payment-processing services because of their political affiliation, religious beliefs, or legal activities (such as firearms retailers, certain political donors, or others cited in the order) may receive outreach and an offer to restore service.