Federal Deposit Insurance Corporation (FDIC) Vice Chairman Travis Hill has called for the agency to address "debanking," a practice where individuals and companies are denied banking services due to their association with digital assets. Hill shared his comments in a January 10 address.
"Access to a bank account is essential for individuals and businesses to participate in many aspects of the modern economy," said Hill. "A longstanding goal of the FDIC's has been to decrease the number of people who are unbanked. Efforts to debank law-abiding customers are unacceptable, regulators must work to end it, and there is no place at the FDIC for anyone who has pushed — explicitly or implicitly — banks to stop serving law-abiding customers."
According to Hill, the FDIC should take a "new direction" starting January 20. He identified addressing debanking as a priority for the agency, likening it to the original "Operation Choke Point," in which "politically disfavored business groups" were denied access to bank accounts. Hill noted reports of individuals and firms in the crypto industry losing access to their accounts "without explanation." He emphasized that the FDIC must stop "any and all Choke Point-like tactics" moving forward.
More than 30 crypto and tech leaders in the U.S. have claimed they have been targeted in what is being referred to as Operation Chokepoint 2.0, according to Yahoo Finance. Andreessen Horowitz Co-founder Marc Andreessen discussed this issue on the Joe Rogan Experience podcast, saying that during the original Operation Chokepoint under the Obama administration, industries considered "high-risk," such as payday lenders, were cut off from financial services. Frax Finance Founder Sam Kazemian said that in 2022 a representative of JPMorgan Chase informed him they had been instructed to close accounts of clients whose primary source of wealth was crypto. Gab Founder Andrew Torba said multiple banks closed his accounts due to pressure from the federal government.
Congressman Ritchie Torres has spoken about how crypto and blockchain technology can provide access to financial services for unbanked and underbanked communities, many of whom are low-income, Federal Newswire previously reported. These technologies can offer a "better, cheaper, and faster payment system," especially for individuals who do not have access to traditional banking services.
Prior to becoming FDIC Board of Directors Vice Chairman in January 2023, Hill served as Deputy to the Chairman for Policy and Senior Advisor to the Chairman of the FDIC. From 2013 to 2018, he was Senior Counsel to the U.S. Senate Committee on Banking, Housing, and Urban Affairs.
