SBA Requires Lenders to Report On “Politicized or Unlawful Debanking” Actions

Posted: Sep 03 2025

The Small Business Administration is directing a network of over 5,000 lenders to “end politicized or unlawful banking practices” and to report on past or current politicized or unlawful debanking practices impacting their clients or potential clients. The letter comes in response to President Trump’s Executive Order entitled “Guaranteeing Fair Banking for All Americans.”

Since the Obama Administration, financial institutions have – both independently and at the direction of federal regulators – weaponized the banking system against Americans who refused to bend the knee to a partisan ideology. Under the leadership of President Donald J. Trump, whose own family and businesses were debanked, those days are over,” said SBA Administrator Kelly Loeffler following the letter’s release. “This Administration is putting an end to the discriminatory debanking practices that have cost too many hardworking Americans their businesses or the opportunity to start one. Access to banking should not be a partisan issue – but far too many confirmed debanking cases have targeted right-leaning businesses, non-profits, and people - including Christian, pro-life, and Second Amendment organizations.”

“Pursuant to Executive Order 14331,” an agency release states, “the SBA’s letter has required its lenders to take the following actions by December 5, 2025:

Identify any past or current formal or informal policies or practices that require, encourage, or otherwise influence their institution to engage in politicized or unlawful debanking as specified by the Fair Banking Executive Order.
Make reasonable efforts to identify and reinstate any previous clients of their institution or any subsidiaries denied service through a politicized or unlawful debanking action in violation of a statutory or regulatory requirement under section 7(a) of the Small Business Act (15 U.S.C. 636) or any requirement in a Standard Operating Procedures Manual or Policy Notice, and send notice of the reinstatement to the injured party.
Identify all potential clients denied access to financial services provided by their institution or any subsidiaries through a politicized or unlawful debanking action in violation of a statutory or regulatory requirement under section 7(a) of the Small Business Act or any requirement in a Standard Operating Procedures Manual or Policy Notice, and provide notice to each otherwise qualified client advising of the denied access and the renewed option to engage in such services previously denied; and
Identify all potential clients denied access to payment processing services provided by your institution or any subsidiaries through a politicized or unlawful debanking action in violation of a statutory or regulatory requirement under section 7(a) of the Small Business Act or any requirement in a Standard Operating Procedures Manual or Policy Notice, and provide notice to each victim advising of the denied access and the renewed option to engage in such services previously denied.”

The SBA letter says Lenders must then “submit a report to the SBA by January 5, 2026, addressing and evidencing their compliance with the above directives to remain in good standing with the agency and avoid punitive measures.”

To read more, visit: https://www.sba.gov/article/2025/08/26/sba-orders-lenders-end-practice-debanking