Illegal Debanking Under Scrutiny: New Task Force Signals DOJ Enforcement Shift

EDVA and CRT established the Task Force in response to growing concerns that banks and other financial institutions were improperly denying services to individuals or organizations for ideological reasons, rather than for legitimate business or compliance purposes. These concerns were highlighted in a January 23, 2025, Executive Order from President Trump, which aimed to “protect and promote fair and open access to banking services for all law-abiding individual citizens and private-sector entities alike.”² Echoing this message, CRT Assistant Attorney General Harmeet K. Dhillon stated, “No customer should be refused credit or other financial services for discriminatory or unlawful reasons.”³

Scope and Focus of the Task Force

The Task Force will leverage EDVA, CRT, and Virginia Office of the Attorney General resources as well as coordinate with federal regulatory agencies as needed. Its work will include reviewing compliance with:

• The Equal Credit Opportunity Act (ECOA), which prohibits discrimination based on race, religion, national origin, sex, marital status, or age in any aspect of a credit transaction;
• The Civil Rights Act of 1964, particularly Title VI, which prohibits recipients of federal financial assistance (e.g., through FDIC insurance, federal grants, or participation in federal programs) from discriminating based on race, color, or national origin; and
• Other federal statutes that prohibit discrimination in the provision of financial services.

Although the Task Force is primarily focused on Virginia, its actions may establish enforcement priorities and legal precedents with broader implications for financial regulatory practices across the country. Notably, the press release announcing the Task Force included a complaint portal open to individuals in other jurisdictions, signaling its potential national reach.⁴

Key Implications for Financial Institutions

Financial institutions with a presence in the Commonwealth of Virginia—and likely elsewhere—should expect increased federal scrutiny of decisions to deny, restrict, or terminate customer relationships. They may face civil investigations, administrative actions, or even criminal inquiries if accused of illegal debanking.

In light of this announcement, financial institutions are strongly advised to:

• Review Customer Onboarding and Exit Policies: Ensure that account opening, maintenance, and closure policies are based on objective, risk-based criteria applied consistently and without bias.
• Document Decision-Making Thoroughly: Maintain detailed records supporting decisions to deny services, especially when customers have political or religious affiliations, to defend against discrimination claims.
• Strengthen Compliance Programs: Train compliance teams on anti-discrimination laws relevant to banking and ensure any concerns are escalated appropriately.
• Conduct Internal Reviews: Audit or review past account closures and service restrictions to confirm they were based on legitimate business or risk considerations.
• Be Cautious with Reputational Risk Decisions: While managing reputational risk is important, ensure it is not used as a pretext for impermissible discrimination.

Broader Context

This initiative comes amid heightened public, executive, and congressional scrutiny of “debanking,” particularly as it affects politically exposed persons, advocacy groups, and faith-based organizations. The DOJ’s announcement may signal a broader trend toward increased enforcement of civil rights protections in financial services. For example, Senator Tim Scott recently introduced the Financial Integrity and Regulation Management (“FIRM”) Act, which would prevent federal regulators from using “reputational risk” as a basis for supervising, examining, or taking enforcement actions against depository institutions.⁵ Similarly, Senator Kevin Cramer has introduced the Fair Access to Banking Act to ensure fair access to financial services for all individuals and businesses by penalizing banks if they refuse to do business with any legally compliant, credit-worthy person.⁶

While the Task Force’s immediate jurisdiction is focused on Virginia, financial institutions nationwide should still pay close attention. Similar federal or state actions may follow, and regulatory agencies could adopt the Task Force’s principles in their broader oversight.

Next Steps

Banks, credit unions, and other financial institutions should promptly review their policies, procedures, and prior account decisions to mitigate legal risks associated with alleged unlawful debanking. Taking proactive measures—such as consulting with legal counsel for guidance or analysis regarding current or prior debanking determinations—can assist institutions in implementing appropriate safeguards, responding effectively to regulatory inquiries, and minimizing potential liability.

Our Government Investigations & White Collar Criminal Defense team, together with our Banking and Finance team, both of which have extensive experience at the Department of Justice, in Virginia, and in the Eastern District of Virginia, are closely monitoring the Task Force’s next steps and initial investigations.  

¹ Press Release, U.S. Attorney announces launch of a task force to combat illegal debanking in the Eastern District of Virginia, U.S. Att’y’s Off. EDVA (Apr. 28, 2025), https://www.justice.gov/usao-edva/pr/us-attorney-announces-launch-task-force-combat-illegal-debanking-eastern-district.

² Strengthening American Leadership in Digital Financial Technology, The White House (Jan. 23, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/.

³ Press Release, supra note 1.

⁴ Id.

⁵ Danielle Shockey, Alabama, South Carolina Senators Introduce FIRM Act to Combat ‘Debanking’, MSN (Mar. 9, 2025), https://www.msn.com/en-us/money/financial-regulation/alabama-south-carolina-senators-introduce-firm-act-to-combat-debanking/ar-AA1AyQz7?ocid=BingNewsVerp.

⁶ Quiver Legislation Radar, New Bill: Senator Kevin Cramer introduces S. 401: Fair Access to Banking Act, Nasdaq (Apr. 17, 2025), https://www.nasdaq.com/articles/new-bill-senator-kevin-cramer-introduces-s-401-fair-access-banking-act; Curtis, Cramer, Colleagues Introduce Legislation To Protect Law-Abiding Industries From Financial Discrimination, John Curtis Senator, https://www.curtis.senate.gov/press-releases/curtis-cramer-colleagues-introduce-legislation-to-protect-law-abiding-industries-from-financial-discrimination/.