The question of whether a presidential pardon should also mean more leniency from banks, which need to weigh the risk they’re taking on when lending capital, is gaining more attention as more people are getting pardons or commutations by presidents.
President Joe Biden has granted over 4,200 pardons and commutations, and President Donald Trump granted 1,700 in his first term and more than 1,600 so far in his second term. Last week, George Santos, who was serving a seven-year sentence after pleading guilty to fraud and identity theft, was pardoned by Trump.
However, that doesn’t mean banks will ignore applicants’ earlier convictions. Financial institutions routinely consider publicly available information when evaluating their potential liability, according to reporting by Bloomberg News.
Elliott Broidy, who was pardoned by Trump at the end of his first term after a conviction for breaking a U.S. lobbying law, was denied an American Express card when he applied for one this year, Bloomberg reported. And Mahmoud Reza Banki, a former chief financial officer of X who had been pardoned of a 15-year-old conviction for making false statements, said JPMorgan Chase (NYSE:JPM) sought to close his accounts, citing the conviction.
Banki spent 22 months in prison before most of his conviction was overturned on appeal.
Both are suing the banks, saying they were “debanked” even with the White House pardons. Republicans, and President Trump, have been accusing large U.S. banks of unfairly “debanking” those who voice conservative views.
In August, Trump signed an executive order instructing federal agencies involved in bank supervision to stop considering reputational risk in assessing banks’ risks.
Banki sued JPMorgan (NYSE:JPM) and Bank of America (NYSE:BAC), alleging they denied him credit due to his dual U.S.-Iranian citizenship. Banki also said JPMorgan (NYSE:JPM) tried to close his First Republic Bank accounts, which JPM acquired when First Republic collapsed in 2023.
“A pardon is not a finding of innocence. It doesn’t in any way mean your conviction was not validly imposed or that you were not guilty of the crime,” Liz Oyer, who was the Justice Department’s top pardon attorney for three years before being fired in March, told Bloomberg.
Richard Crone, a financial payments consultant, told Bloomberg that limiting banks’ ability to include customers’ past criminal activities in their assessments could expose the financial institutions to money laundering, fraud, and sanctions violations.
Bank of America (NYSE:BAC) declined to comment to Bloomberg. American Express (NYSE:AXP) said the company doesn’t comment on individual clients or account decisions.
Last year, JPMorgan Chase (JPM) updated its policy to prohibit discriminating against customer for “political opinions, speech, or affiliations” and “religious views.”
A JPMorgan Chase (JPM) spokeswoman said the company decided to leave Banki’s former First Republic accounts open due to his successful appeal and the amount of time that had passed without further criminal charges, according to the article.
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