by Jake Pearson

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Last month, when President Donald Trump signed an executive order “guaranteeing fair banking for all Americans,” he served notice of a coming federal crackdown.

Banks who have denied customers access to accounts, loans or credit cards “on the basis of political or religious beliefs or lawful business activities,” he said, would now feel the full force of government regulators. Violators could find themselves facing fines, consent decrees or “other disciplinary measures” in an effort to stamp out “politicized or unlawful debanking.”

The cause hits close to home for the president, whose family business sued Capital One earlier this year, alleging, without providing evidence, that hundreds of its accounts were closed in the summer of 2021 “as a result of political discrimination.”

Even so, the administration may find it difficult to enforce the president’s order for one simple reason: Seven months of aggressive cost-cutting and government downsizing has left the Consumer Financial Protection Bureau, one of the primary regulators that Trump tasked with carrying out his banking directive, a shell of an agency.

In fact, CFPB leaders appointed by the president are awaiting final court approval to fire the majority of the bureau’s remaining staffers, a move that would leave just a skeleton crew in place and likely end dozens of investigations into alleged corporate malfeasance. Since February, most staffers have been under a stop-work order that has effectively stalled the bulk of its probes — including ones into debanking.

Among them are investigations into why JPMorgan Chase and Citibank freeze and close bank accounts, respectively, according to people familiar with the matters. Work was also suspended on inquiries into whether two little-known companies that banks use to screen prospective customers have wrongly flagged some as too risky to serve, said the people, who spoke on condition of anonymity because they were not authorized to discuss sensitive matters.

Court records show that one of those firms, Regulatory DataCorp, provides reports on customers to Capital One — the very financial institution that Trump’s family business has accused of debanking. (A Capital One spokesperson declined to comment, but the bank has disputed the Trump business’s claims of political discrimination and moved to dismiss its lawsuit, writing in court papers that it was “false” that the bank closed Trump accounts because it disagreed with the president’s views.)

In dismantling the CFPB, the Trump administration has portrayed the agency as an industry antagonist and an example of government overreach. But Luke........

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