Every public pronouncement I remember from Andreesen seemed like commonsense (unlike those of Elon Musk, which are often nonsense).
Over the past ten years, I’ve increasingly heard about people on the right getting debanked for their political views. Debanking is not primarily about individual bank managers making nasty decisions, it is about a structure set up by TARP in 2008 and chiefly weaponized by Democrats against their opponents.
In her new memoir, former First Lady Melania Trump reveals that she was abruptly dropped by a bank with which she had a long-standing financial relationship. She also discloses that her son, Barron, was blocked from opening a new account at the same bank, the name of which she does not reveal.
It’s unclear from the memoir if the bank harbored concerns about the legality of her deposits, or if bank associates were motivated by animus against the Trump family, since banks and not required to alert customers about either of those things. But Melania believes the refusal to open an account for Barron, at least, was driven by political discrimination.
Banks, like other private businesses, have the right to refuse service to would-be customers —whether for reputational risks, financial risks, or compliance concerns. However, there is a growing sense that financial institutions are being “nudged” by state regulators to act in line with political priorities.
Debanking is an alarming problem in the banking industry. It is the practice of financial institutions refusing services for political reasons to individuals, companies, or organizations. The relationship between a firm’s discretion, preference, and behind-the-scenes governmental pressure on financial firms has grown more intertwined since the 2008 financial crisis. Following the 2008 crash, a host of new laws and regulations were introduced around the world, such as the Dodd-Frank Act and Basel III, respectively, increasing regulatory scrutiny on banks’ risk management and corporate governance practices.
Most notoriously, the Obama administration’s “Operation Choke Point” targeted specific industries, such as firearms and ammunition manufacturers, by pressuring banks to cut off financial services. The initiative received blowback and revealed how government regulatory power can be misused to limit financial access. More recently, regulators have pressured banks to deny financial services to crypto-related businesses in what is being called Choke Point 2.0.
“What do Barron Trump, son of the president-elect; some Islamic charities in Britain; and America’s legal cannabis industry have in common? This is not a set-up for a bad joke. Rather, all have been at the sharp end of a rise in “debanking”, having lost or been refused access to the services of commercial lenders.”
The Heritage Foundation published Dec. 10:
President Biden has overseen nearly four years of a two-tiered justice system, as his pardoning of Hunter Biden and the political persecutions of then-candidate Donald Trump make all too clear.
But there have been quieter attacks on justice, like “debanking”—and few people realize they could be the next victims because they are a “politically exposed person,” that is someone who disagrees with the liberal status quo.
Debanking is a kind of financial blackballing that has appeared within just the last 20 years.
It started under then-President Barack Obama as a war to punish those seen as political enemies, like firearm manufacturers. Government documents unsealed at the end of 2020 proved that the federal government used its regulatory authority over financial markets to attack political opponents.
Government regulators essentially make it impossible for certain people or businesses to make online transactions, or to have a bank account or a credit card…
Dr. Joseph Mercola, a critic of the COVID vaccine, found his business accounts shut down by JP Morgan Chase, a move his chief financial officer claimed was at the same time Mercola spoke out against the Food and Drug Administration.
In her new memoir, Melania Trump says her bank account was terminated after the riots of Jan. 6, 2021, and her son Barron was unable to open his own account. She called it “political discrimination.”
In the modern world, exclusion from electronic financial services is an economic death sentence.
Regulators will claim that they’re not technically forbidding a private bank from doing business with an individual, and that the bank is freely choosing not to have that person as a customer.
But the reality is very different—because of the undue influence and control in the hands of today’s bloated administrative state.
A bureaucrat can make someone’s life so difficult that the victim is forced to comply—the government strong-arming a private individual or institution into doing what the government itself cannot do by law.
It’s like when the Biden administration pressured social-media companies into deplatforming anyone who questioned political talking points about the COVID pandemic.
The debanking scourge under President Biden has hit the crypto world particularly hard. The Securities and Exchange Commission has unleashed a plague of investigations, some real and some merely threatened, to force innovators and investors out of that space.
Dozens of tech and crypto founders have been debanked under Biden, and their inventions smothered.
On Joe Rogan‘s podcast, venture capitalist Marc Andreessen blamed the Consumer Financial Protection Bureau, a group set up at the behest of Sen. Elizabeth Warren (D-Mass.) to go after crypto firms in particular.
“Basically every crypto founder, every crypto startup, either got debanked personally and forced out of the industry, or their company got debanked,” Andreessen said.
Andreessen added that others, like Kanye West, have been debanked, “For having the wrong politics. For saying unacceptable things. Under current banking regulations, after all the reforms of the last 20 years, there’s now a category called a politically exposed person, PEP. And if you are a PEP, you are required by financial regulators to kick them off, to kick them out of your bank.”