Earlier this month, court filings disclosed that Capital One closed 385 bank accounts associated with President Donald Trump in 2021 after flagging financial activities characteristic of money laundering. Financial institutions are required to follow a strict compliance regime that includes anti–money laundering (AML) and countering the financing of terrorism (CFT) regulations. Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake.
Here's what it is and 3 simple steps to fix it ASAP The tax breaks in Trump's 'big beautiful bill' expire after 2028. Here are 4 moves to make before the window closes Trump's trust, his companies and his son Eric Trump filed a lawsuit against Capital One last year, alleging the accounts were closed for political reasons following public backlash to the Jan. 6 attacks on the U.S. The accounts included businesses such as a winery, a bottled-water company and a golf course developer.
A spokesperson for Trump's legal team told The that the lawsuit "holds Capital One accountable for its disgraceful conduct." Trump has also sued JPMorgan Chase for debanking him in 2021. Lawyers for Capital One, on the other hand, said in a court filing on July 31 that the closures "were the result of months of analysis and a careful review by Capital One's AML team in accordance with bank policies and regulatory guidance." The money laundering review was only made public because of Trump's lawsuit against the bank. Debanking occurs when a bank or financial institution closes a customer's account or stops providing services.
Often, this happens with little or no explanation, since bankers are bound by confidentiality laws. However, the reasons typically involve legal, regulatory, financial or reputation risk to the bank. Since they need to follow strict regulations, like AML, they may choose to close accounts with unusual or high-risk transaction patterns.
Indeed, on Jan. 15, 2021, before Capital One closed Trump's accounts, the firm was charged with a massive penalty — $390,000,000 — by the Financial Crimes Enforcement Network (FinCEN) for "willfully failing to implement and maintain an effective Anti-Money Laundering (AML) program to guard against money laundering." Capital One also admitted that it failed to file thousands of suspicious activity reports (SARs) from 2008 through 2014 connected to the Check Cashing Group, with proceeds of suspicious transactions linked to organized crime, tax evasion, fraud and other financial crimes. Months later, Capital One closed 385 accounts connected to Trump. At the same time, banks have the right to close accounts, especially if their data reveals the potential for regulatory noncompliance — which can lead to hefty penalties.
For example, in Capital One's court filing, the firm states it has the right to close an account "at any time, for any or no reason and without notice." JPMorgan, too, has stated that it closes accounts that create "legal or regulatory risk." But debanking isn't new — and, according to one study, it's government debanking that's the bigger problem. Read More: Vanguard reveals what's coming for U.S. stocks — and it could be bad news for this group of investors Fewer than 1% of customers who filed debanking complaints with the U.S. Consumer Financial Protection Bureau over the past 13 years did so for alleged political or religious discrimination, according to a review by of 8,361 account closure complaints during that period.
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