Debanking Bill Heads to House Floor

Bank lobbyists hardest hit

Last year, in the heart of election season, the chairman of the Constitution Party of Idaho received a check in the mail for the amount of money in the organization’s account at U.S. Bank. According to Chairman Tony Ullrich, the party’s account was always in good standing, and there was no financial reason to close it. He believes it was closed for ideological reasons.

There appears to have been an epidemic of debanking throughout the nation over the past decade or two, as financial organizations have closed accounts of Christian charities, conservative political organizations, and companies that sell or manufacture firearms. In nearly every case, the bank has declined to explain why the accounts were closed. Many believe it was for ideological or religious reasons.

Banks and financial institutions are some of the most heavily regulated corporations in America. “Reputational risk” seems to be used as a catch-all giving banks the authority to cancel any account they wish without having to provide an explanation. A bill in the US Senate sponsored by Sen. Tim Scott of South Carolina seeks to remove that excuse, and it passed its committee hearing on a party line vote earlier today.

Lawmakers in Idaho have taken notice of the debanking problem as well. Sen. Kelly Anthon introduced Senate Bill 1027 back in January, seeking to prohibit large banks from canceling customer accounts based on ideological or religious reasons and giving those customers a private cause of action if that occurs. Despite fierce opposition from banking lobbyists, S1027 passed the Senate with amendments 32-2-1, with some Democrats supporting the bill.

This afternoon, Rep. Josh Tanner presented S1027 in the House Business Committee during a tense hearing. He said he had never heard of debanking until just a few years ago, and was angry that the very banks that had begged taxpayers for bailouts during the Great Recession have now turned around and started discriminating based on ideology. He said that a firearms manufacturer he has purchased equipment from in the past was on the list of debanked organizations.

Tony Ullrich of the Constitution Party shared his story, and attorney Matt Sharp of Alliance Defending Freedom testified remotely in support of the bill. Stacy Satterlee, president and CEO of the Idaho Banker’s Association, testified in opposition. She admitted that the bill was likely to pass, but presented members of the committee with copies of amendments she hopes they would consider.

Satterlee flatly denied that banks ever cancel customer accounts for ideological or religious reasons. She said that banks are required by federal law to close accounts upon suspicion of fraud, and in such cases are prohibited from informing customers of the reason for cancellation. She suggested that those who have received no explanation for their cancellation could possibly be due to such suspicion.

Rep. Brent Crane asked Satterlee if she had shared her proposed amendments with the sponsor, but she said she had been unable to meet with Rep. Tanner thus far. When he returned to close his presentation, Tanner said he was extremely frustrated that a lobbyist had been allowed to speak for an extended time and submit proposed amendments directly to the committee. Chairman Lance Clow put the committee at ease and spoke with Tanner outside, along with Reps. Brent Crane, Jaron Crane, and Jason Monks. They returned a few minutes later to finish the hearing.

Rep. Cornel Rasor shared that he himself had been debanked, and unlike Ullrich had to fight to get access to his own money. Rep. Steve Berch, one of two Democrats on the committee, debated against the bill, agreeing with Satterlee that debanking for ideological reasons probably wasn’t really happening and this bill would create an ability for a future attorney general to go on a witch hunt, intimidating private businesses.

Rep. Jordan Redman moved to send S1027 to the floor with a “do pass” recommendation and the motion carried on a 15-2 party line vote. The House will vote on the bill soon, and once signed by the governor, will go into effect.

I have an interesting postscript to this story. A few weeks ago, I was approached via direct message by a national figure in the Trump orbit. He asked me to post a tweet in opposition to this bill, promising to repost it for his much larger audience. I asked why he would oppose a bill to stop banks from discriminating against conservatives, and he said it would impact President Trump’s ability to go after leftist organizations like Planned Parenthood. He eventually grew tired of my questions.

I did not make such a post, because I think this is a good bill for the people of Idaho. Planned Parenthood is not a powerful political force here — we banned their cash cow of abortion. On the other hand, real people like Tony Ullrich are having their accounts closed without warning, likely for ideological reasons. I appreciate Sen. Anthon and Rep. Tanner for bringing this legislation.