Finance

Trump takes shot at Bank of America, revives claims of discrimination

Published

5 months ago

January 23, 2025

President Donald Trump on Thursday accused the CEOs of the two largest American banks of refusing to serve conservatives, reviving a 2024 campaign talking point that the two companies deny.

Speaking via video to an assembly held at the World Economic Forum in Davos, Trump lashed out at Bank of America CEO Brian Moynihan and JPMorgan Chase CEO Jamie Dimon as part of a question-and-answer session.

“I hope you start opening your bank to conservatives, because many conservatives complain that the banks are not allowing them to do business within the bank, and that included a place called Bank of America,” Trump said.

“You and Jamie and everybody, I hope you’re going to open your banks to conservatives, because what you’re doing is wrong,” Trump said.

Moynihan, who was among a few executives selected to ask the president questions during the Q&A, didn’t immediately respond to the accusation.

Both banks deny refusing service to conservatives.

“We serve more than 70 million clients, we welcome conservatives and have no political litmus test,” a Bank of America official said in an email.

“We have never and would never close an account for political reasons, full stop,” a JPMorgan spokeswoman said in a statement. “We follow the law and guidance from our regulators and have long said there are problems with the current framework Washington must address.”

In the aftermath of the 2008 financial crisis, caused in part by shoddy lending standards at major banks, U.S. regulators increased pressure on lenders to purge clients in industries considered higher risk for money laundering or fraud. That meant that payday lenders, pawn ships, firearms dealers, and those involved in pornography had their accounts revoked, often with little notice or explanation as to why.

As recently as October, Trump singled out Bank of America, repeating claims that it discriminates against conservatives.

The accusations may have roots in allegations from state attorneys general last year. In April, Kansas Attorney General Kris Kobach sent a letter to Moynihan, accusing the bank of canceling the accounts of “multiple religious groups with mainstream views in the last three years.”

In a May letter in response to Kobach, Bank of America said accounts are de-banked for reasons including a change of stated purpose of the account, the expected level or type of activity on the account, or failure to verify certain documentation required by law.

One account highlighted by Kobach was de-banked because it engaged in debt collection services, which was inconsistent with the Bank of America division that was servicing the account, according to the bank’s response.

“We would like to provide clarity around a very straightforward matter: Religious beliefs or political view-based beliefs are never a factor in any decisions related to our client’s accounts,” the bank said in that letter. “Bank of America provides banking services to non-profit organizations affiliated with faith-based communities throughout the United States. We have banking and investing relationships with approximately 120,000 faith-based clients in the United States.”

Influential people in Trump’s orbit have continued to claim that banks are discriminating based on religion or politics.

In November, Marc Andreessen, co-founder of the venture capital firm that bears his name, told podcaster Joe Rogan that dozens of startup founders had been de-banked in recent years. Andreesen has said he advises Trump on technology matters.

Bank of America shares were up more than 1% on Thursday, with JPMorgan shares higher as well.

The banking industry is seen as one of the biggest beneficiaries of the election of Trump, in large part because of expectations he would kill Biden-era regulatory efforts to force banks to hold tens of billions of dollars in additional capital against losses, make annual stress tests less opaque and drop efforts to cap credit card and overdraft limitations.

Finance

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Published

1 day ago

June 6, 2025

Business Finance News

Finance

Swiss government proposes tough new capital rules in major blow to UBS

Published

2 days ago

June 6, 2025

Business Finance News

A sign in German that reads “part of the UBS group” in Basel on May 5, 2025.

Fabrice Coffrini | AFP | Getty Images

The Swiss government on Friday proposed strict new capital rules that would require banking giant UBS to hold an additional $26 billion in core capital, following its 2023 takeover of stricken rival Credit Suisse.

The measures would also mean that UBS will need to fully capitalize its foreign units and carry out fewer share buybacks.

“The rise in the going-concern requirement needs to be met with up to USD 26 billion of CET1 capital, to allow the AT1 bond holdings to be reduced by around USD 8 billion,” the government said in a Friday statement, referring to UBS’ holding of Additional Tier 1 (AT1) bonds.

The Swiss National Bank said it supported the measures from the government as they will “significantly strengthen” UBS’ resilience.

“As well as reducing the likelihood of a large systemically important bank such as UBS getting into financial distress, this measure also increases a bank’s room for manoeuvre to stabilise itself in a crisis through its own efforts. This makes it less likely that UBS has to be bailed out by the government in the event of a crisis,” SNB said in a Friday statement.

‘Too big to fail’

UBS has been battling the specter of tighter capital rules since acquiring the country’s second-largest bank at a cut-price following years of strategic errors, mismanagement and scandals at Credit Suisse.

The shock demise of the banking giant also brought Swiss financial regulator FINMA under fire for its perceived scarce supervision of the bank and the ultimate timing of its intervention.

Swiss regulators argue that UBS must have stronger capital requirements to safeguard the national economy and financial system, given the bank’s balance topped $1.7 trillion in 2023, roughly double the projected Swiss economic output of last year. UBS insists it is not “too big to fail” and that the additional capital requirements — set to drain its cash liquidity — will impact the bank’s competitiveness.

At the heart of the standoff are pressing concerns over UBS’ ability to buffer any prospective losses at its foreign units, where it has, until now, had the duty to back 60% of capital with capital at the parent bank.

Higher capital requirements can whittle down a bank’s balance sheet and credit supply by bolstering a lender’s funding costs and choking off their willingness to lend — as well as waning their appetite for risk. For shareholders, of note will be the potential impact on discretionary funds available for distribution, including dividends, share buybacks and bonus payments.

“While winding down Credit Suisse’s legacy businesses should free up capital and reduce costs for UBS, much of these gains could be absorbed by stricter regulatory demands,” Johann Scholtz, senior equity analyst at Morningstar, said in a note preceding the FINMA announcement.

“Such measures may place UBS’s capital requirements well above those faced by rivals in the United States, putting pressure on returns and reducing prospects for narrowing its long-term valuation gap. Even its long-standing premium rating relative to the European banking sector has recently evaporated.”