Trump’s escalation with JPMorgan highlights banks reputational issues with trying to control the narrative.

In recent regulatory filings, JPMorgan and Bank of America (BofA) said they’re responding to government requests related to policies and processes around “providing, maintaining, or discontinuing financial products or services to certain clients or potential clients.” The fire politicians are stoking introduces reputational and business risks for banks among customers as well as the risk of regulatory action by agencies that have traditionally demanded rigorous screening of current and prospective customers.

The news: President Donald Trump is expected to sign an executive order against alleged “debanking,” claiming that JPMorgan Chase and Bank of America discriminated against him by rejecting his company's deposits, per The New York Times. The fallout: Some FIs may alter their risk management practices to avoid a personal vendetta. But by mandating that banks cannot debank certain groups for fear of being accused of political bias, the order essentially limits their ability to manage risk. This could expose FIs to clients with legitimate compliance or reputational concerns. It also forces FIs to choose between political and financial blowback and carries a long-term risk of losing young, socially conscious customers. Gen Zers particularly care about banks’ actions when it comes to what they deem as moral issues, like the environment or DEI. Diverting from prior commitments young consumers supported could risk their loyalty.

The president’s organization has accused Capital One of debanking based on ‘wokeness.’