Small Business Administrator Kelly Loeffler: Ending Debanking Is About Fairness
Jack Posobiec and Kelly Loeffler, Administrator of the U.S. Small Business Administration, discuss “debanking” and how the SBA is trying to prevent financial institutions from doing business with people on the basis of political views and “reputational risk.”
JACK POSOBIEC: Your office has been fighting debanking, this practice that has gone on. We’ve talked to ranchers facing this because they don’t like certain policies, religious beliefs, or freedom of speech issues. How is the SBA fighting this debanking that we’re seeing go along? SBA ADMINISTRATOR KELLY LOEFFLER: President Trump signed an executive order to end debanking, return fair banking to all Americans. It shouldn’t have even do an EO about that; it should be a business practice, but under Obama, it started with Operation Chokepoint, where they targeted certain businesses and starting using “reputational risk” as criteria for bank examinations, so banks got very concerned about banking some clients particularly in the 2A space. For example, gun manufacturers, ammunition, gun stores, but then it spread obviously to other places and ended up being pro-life or Christians are conservatives. And over, obviously under Biden, Chokepoint 2.0 came up, so now we’ve even seen it at the regulatory level, OCC, FDIC, the Federal Reserve were doing bank examinations based on reputational risks of clients. When shareholders tried to sue to stop that, to say we should be maximizing shareholder return and banking for anyone who’s a legal business, the Biden administration blocked those shareholders proposals to stop debanking. That’s how activist this government got. So we put out a letter to our 5,000 banking clients at the SBA demanding any examples of debanking and to end that practice, which thankfully the federal regulators are also working hard, end the Federal Reserve Board withdrew their guidance to end evaluation on reputational risks. So we’re going to get there, but it’s a culture shift that undoes a lot of the damage over the last 16 years.
