"Jersey AML vs. Trump’s Anti-Debanking Order: Lessons or Divergence?"

Earlier today [Aug 7], President Trump signed an Executive Order titled “Guaranteeing Fair Banking for All Americans.”

• The Order states that “it is the policy of the United States that no American should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations, or political views” and that “banking decisions must instead be made based on individualized, objective, and risk-based analyses.”
• The Order specifies several directives to address “politicized or unlawful debanking,” which generally refers to restricting access to financial services based on a customer’s “political or religious beliefs” or “lawful business activities that the financial service provider disagrees with or disfavours for political reasons”:

As Jersey looks at the USA for more financial services business and connections, will President Trump’s latest decree create some uncertainty for compliance and risk managers?

• The executive order signed by President Trump in August 2025, targeting what he calls “politicised debanking,” has stirred debate across the global financial compliance community. The order prohibits U.S. banks from denying services to politically exposed persons (PEPs) or others based on political or religious beliefs. It also removes “reputational risk” as a regulatory justification for offboarding clients—a concept deeply embedded in many AML frameworks, including Jersey’s.
• For Jersey, a jurisdiction known for its robust trust and company service sector and close ties to UK and international financial standards, this shift raises important questions.

Reputational Risk: A Diverging Standard?

• Jersey’s AML regime, like the UK’s, still considers reputational risk a valid factor in client risk assessments. If U.S. regulators begin penalizing banks for using this criterion, Jersey firms with U.S. exposure may face pressure to reassess their own policies. Could this lead to a softening of risk-based approaches, or will Jersey double down on its commitment to FATF-aligned standards?

PEPs: Risk or Rights?

• Trump’s order challenges the blanket classification of PEPs as high-risk, urging banks to adopt more nuanced, individualized assessments. This aligns with recent UK guidance (FCA FG25/3), which suggests domestic PEPs should not automatically be treated as high-risk. Jersey may need to clarify its own stance—especially for politically exposed clients with U.S. ties or dual nationality.

Cross-Border Compliance Tensions

• Jersey firms operating internationally may find themselves caught between conflicting expectations. U.S. regulators now discourage debanking based on ideology, while Jersey’s AML framework still allows for discretion based on reputational concerns. This tension could complicate onboarding, offboarding, and SAR filing decisions—especially in politically sensitive cases.

What Should Jersey Do?

• Review internal AML policies for alignment with evolving global standards.
• Clarify PEP risk assessment protocols, especially for clients with U.S. connections.
• Engage with regulators and industry bodies to ensure Jersey’s position remains clear and defensible.
• Train staff to navigate the shifting landscape of compliance, balancing legal obligations with ethical considerations.

Conclusion: A Time for Reflection, Not Reaction

• President Trump’s executive order may not directly alter Jersey’s AML laws, but it does challenge some of the assumptions that underpin global compliance practices.
• for Jersey, the opportunity lies not in imitation, but in introspection: to ask whether its frameworks are fair, proportionate, and resilient in a world where politics and finance are increasingly intertwined.

Some key facts

On August 7, 2025, U.S. President Donald Trump signed an executive order aimed at curbing what he described as “politicised or unlawful debanking “the practice of financial institutions denying services to individuals or entities based on political or religious beliefs.

1. 🔍 Key Provisions of the Executive Order
   1. Ban on Ideological Discrimination
   2. Banks and financial institutions are prohibited from refusing services based on:
   3. Political affiliation (e.g., conservative views, MAGA-related transactions)
   4. Religious beliefs
   5. Lawful business activities
2. Regulatory Oversight and Enforcement
   1. Federal banking regulators must review all supervised banks for current or past discriminatory practices.
   2. Agencies are empowered to impose fines, consent decrees, or refer cases to the Justice Department for civil action.
   3. Regulators must purge internal policies that discourage banks from serving clients for non-financial reasons.
3. Reputational Risk Removed
   1. The order eliminates “reputational risk” as a regulatory standard, which had previously allowed banks to avoid clients deemed controversial or politically sensitive.
   2. Small Business Administration (SBA) Mandate
   3. Financial institutions participating in SBA programs must make reasonable efforts to reinstate clients previously denied services due to debanking.
   4. 180-Day Compliance Window
   5. Regulators have 180 days to complete reviews and implement changes.

Context and Implications

1. The order follows complaints from conservatives, religious groups, and digital asset firms about being unfairly excluded from banking services.
2. Trump cited personal experiences, alleging that JPMorgan Chase and Bank of America refused to accept over \$1 billion in deposits from his businesses for political reasons.
3. The move is seen as a response to Operation Chokepoint 2.0, a controversial regulatory initiative that targeted certain industries (e.g., firearms, crypto) for enhanced scrutiny.

Industry Reaction

1. Major banking associations welcomed the order, stating it would help clarify vague regulations and reduce regulatory overreach.
2. Banks have argued that prior debanking decisions were often driven by AML compliance and regulatory pressure, not political bias.

References

• Fact Sheet: President Donald J. Trump Guarantees Fair Banking for All ...https://www.whitehouse.gov/fact-sheets/2025/08/fact-sheet-president-donald-j-trump-guarantees-fair-banking-for-all-americans/
• Trump targets banks with order barring discriminatory 'debanking' - CNBC https://www.cnbc.com/2025/08/07/trump-targets-banks-with-order-barring-discriminatory-debanking.html
• Trump to crack down on banks over alleged political bias https://www.politico.com/news/2025/08/07/trump-banks-crackdown-debanking-00497145
• https://www.sullcrom.com/insights/memo/2025/August/President-Trump-Issues-Executive-Order-Politicized-Unlawful-Debanking