In a further step against the scourge of 'de-banking' the US Senate Banking Committee has announced that the Federal Deposit Insurance Corporation will eliminate the use of reputational risk as a factor in banking supervision.

This follows the Committee's passage of the Financial Integrity and Regulation Management Act (FIRM), which prevents regulators from using "reputational risk" as a tool to discriminate against businesses.

This has received support from a wide range of stakeholders, including the financial services industry and organisations representing industries that have been de-banked.

Just recently, two of Donald Trump's family organisations have sued American banking giant Capital One for their decision to close their accounts after the US Capitol riots of January 2021.

The Trump Organization described the account closures as an attack on free speech and free enterprise, with the suit claiming that the decision was a response to Trump’s political views.

This trend is not unique to the US, with similar accusations surfacing in other countries including South Africa.

For instance, the Sekunjalo Group's standoff against major banks raises critical questions about de-banking practices in South Africa.

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In the past years several banking institutions have attempted to terminate their banking relationships with Sekunjalo despite ongoing legal challenges and the absence of any findings of wrongdoing against the Group.

In its court filings, the Group, through its founder Iqbal Survé, has made compelling arguments in its court filings, suggesting that racial discrimination rather than genuine reputational risk may be the driving force behind the bank's actions.

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In February MK Party MP Brian Molefe said urgent intervention was required to prevent banks from arbitrarily closing the accounts of clients without providing valid reasons.

He also expressed concern over the lack of a formal adjudication body to oversee such closures, stating that the practice was irrational and arbitrary.

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