The White House is preparing an executive order that would allow federal regulators to penalise banks for dropping customers based on political beliefs, according to reports from the Wall Street Journal and Reuters.

The move, which could be enacted as soon as this week, is the latest in a series of efforts by the Trump administration to reshape the regulatory landscape for financial institutions.

A draft version of the order, seen by the Wall Street Journal, instructs regulators to investigate whether banks have breached the Equal Credit Opportunity Act, antitrust laws, or consumer financial protection laws. If violations are found, financial institutions could face monetary penalties, consent decrees, or other disciplinary actions. The draft also calls for the removal of any regulatory policies that may have contributed to banks dropping customers for political reasons, and directs the Small Business Administration to review the practices of banks that guarantee its loans.

The White House declined to comment when contacted by Reuters about the reported executive order. The move follows months of criticism from President Donald Trump and other Republicans, who have accused major banks of discriminating against conservative clients and businesses.

In January, President Trump said the chief executive officers of JPMorgan Chase and Bank of America had refused to provide banking services to conservatives, a claim both banks denied. “The two banks denied making banking decisions based on politics,” reported Reuters, referencing the banks’ responses to the allegations

This executive order is part of a broader reform agenda by the Trump administration, which aims to modify capital requirements and other rules for financial institutions. Supporters argue that these changes will promote economic growth and foster innovation, while critics warn that politicising access to banking services could undermine the stability and neutrality of the financial system.

The draft order does not name specific banks, but references recent controversies, including accusations that Bank of America closed accounts belonging to a Christian organisation operating in Uganda. The bank stated it shut down the accounts because it does not serve small businesses operating outside the United States.

As the administration pushes ahead, banks have responded by clarifying their policies and meeting with Republican state officials to address concerns about discrimination based on political affiliation.

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