By debanking conservatives, JPMorgan and Bank of America may be “debanking” themselves, On The Money has learned.
It all stems from a raft of bad publicity that began with President Trump’s statements in Davos a couple of weeks ago, accusing the nation’s No. 1 and No. 2 banks of cancelling accounts of conservatives. It continued with Wednesday’s Senate Banking Committee hearing on the matter.
The result: Some customers began to flee the big guys, and at least one beneficiary has been to a small online bank that is beginning to make a name for itself in conservative circles by claiming to be a safe haven from woke banking.
That would be Old Glory Bank, which bills itself as free from the “cancel-culture and snooping eyes” that big banks employ against conservatives. Officials there tell On The Money that they’ve seen a significant upswing in business following Trump’s broadside where he called out JPMorgan Chase CEO Jamie Dimon and Bank of America’s Brian Moynihan by name for cancelling eight-leaning banking accounts.
Old Glory accumulated over 2,000 new customers in just the first 36 hours after Trump’s comments. The bank also saw an upswing in social media engagement — around 700,000 mentions — of the little-known financial institution. Old Glory’s CEO Mike Ring even got to take a victory lap by testifying at the hearing, crowing about how cancel culture permeates big financial institutions.
Truth be told, Old Glory has a long way to go before it goes head-to-head with the likes of JPM. It has about $180 million in assets. JPM has $4 trillion; BofA has $3.4 trillion. And officials from both banks say they haven’t seen material levels of deposits flowing elsewhere. Old Glory, located in Oklahoma, was launched a little more than a year ago and lost about $9 million in its last quarter ending Sept 30, filings show.
That said the recent news cycle has been good and you can’t say the same for JPM or BofA or any of the mainstream banks. Executives at these places have spent the past couple of weeks scrambling to respond to Trump and other lawmakers, even lefty Massachusetts Sen. Elizabeth Warren, for canceling accounts over various political reasons (Warren cited Wells Fargo and Citigroup as well).
And the banks’ defense has been a bit muddled. On one hand, executives say they don’t purposely debank or cancel accounts over politics. But they also concede they are under pressure to remove accounts that regulators deemed problematic.
Those accounts usually lean right, people involved in causes like protecting the Second Amendment (a crackdown that began during the Obama years with “Operation Choke Point”) and crypto, which the Biden administration believed was a business dominated by illegal activity such as money laundering.
Evidence released during the hearing bolstered some of these claims. According to reporting by Fox Business’s Eleanor Terrett, Republican Wyoming Sen. Cynthia Lummis released a document from the Federal Reserve outlining how banks must proceed with caution when dealing with customers that could be seen as “controversial.”
Banking executives say the vagueness of the rules coupled with the Biden administration’s opposition to crypto and concern over right-wing causes forced them to cancel many accounts rather than risk heavy fines. They say they’ve been asking the regulators for years to better define “controversial,” and have yet to receive any real guidance.
A Fed spokesman had no comment, but thanks to Trump, that guidance should be coming shortly. In the meantime, little Old Glory Bank can make its run against JPM.
