The Small Business Administration (SBA) has published a notice in the Federal Register seeking approval from the Office of Management and Budget (OMB) for a new information collection effort. This initiative stems from an Executive Order issued by President Donald J. Trump on August 7, 2025, titled "Guaranteeing Fair Banking for All Americans." The order instructs the SBA and federal banking regulators to eliminate what it describes as politicized or unlawful debanking, where financial institutions deny services to individuals or businesses based on political views. The proposed reporting requirement would require SBA lenders to document their compliance, with an estimated annual burden of 3,875 hours across 5,000 responses. Published on December 5, 2025, in Volume 90 of the Federal Register, this 30-day notice opens a window for public comments until January 5, 2026, highlighting the administration's push to address perceived biases in financial services. This development underscores ongoing debates about the role of politics in banking and the regulatory tools used to enforce fairness.
Background on the Executive Order
President Trump's Executive Order on Guaranteeing Fair Banking for All Americans represents a response to concerns over debanking, a term referring to the closure or denial of bank accounts and services to entities deemed politically controversial. The order, issued in August 2025, explicitly directs the SBA, alongside agencies like the Federal Reserve and the Office of the Comptroller of the Currency, to prohibit such practices when they are driven by political favoritism or unlawful directives from regulators. According to the Federal Register notice, this information collection is essential to "evidence SBA Lender compliance with this Executive Order."
Debanking has roots in broader discussions about financial inclusion and discrimination. For instance, reports from conservative groups have highlighted cases where banks allegedly closed accounts of organizations involved in gun rights advocacy or certain religious activities, often citing risk management policies. The order builds on prior Trump-era policies emphasizing deregulation and protection against perceived ideological biases in business. It aligns with executive actions like the 2018 Executive Order 13864, which promoted free inquiry on college campuses, reflecting a pattern of using presidential authority to counter what the administration views as institutional overreach.
Key Players and Regulatory Framework
The primary agency involved is the SBA, which oversees lending programs that support small businesses through guaranteed loans. SBA lenders, including banks and non-bank financial institutions, are the respondents targeted by this information collection. The OMB plays a crucial role as the gatekeeper under the Paperwork Reduction Act of 1995, which requires federal agencies to justify new reporting burdens and minimize paperwork on the public. Alethea Ten Eyck-Sanders, the Interim Agency Clearance Officer, signed the notice, emphasizing the need for public input on aspects like burden accuracy and ways to enhance data quality.
Federal banking regulators, though not directly issuing the notice, are implicated in the Executive Order's directives. These include the Federal Deposit Insurance Corporation (FDIC) and the Consumer Financial Protection Bureau (CFPB), which have faced scrutiny in past congressional hearings over guidance that some argue encourages debanking. For example, a 2022 House Financial Services Committee report criticized FDIC actions that allegedly pressured banks to sever ties with payday lenders, illustrating the political forces at play. President Trump's order positions the executive branch as a counterbalance, mandating agencies to ensure fair access without political interference.
Details of the Proposed Information Collection
The notice outlines a new OMB Control Number to be assigned for "Guaranteeing Fair Banking for All Americans Executive Order Reporting." It targets SBA lenders, estimating 5,000 annual responses and a total burden of 3,875 hours. This calculation likely accounts for time spent compiling compliance evidence, such as internal policies or account decision records, to demonstrate adherence to the Executive Order.
Public comments are solicited on four key areas: the necessity of the collection for SBA functions, the accuracy of burden estimates, methods to minimize burden through technology, and improvements to the information's quality and utility. Comments can be submitted via the reginfo.gov portal, with supporting documents available from the SBA's Interim Agency Clearance Officer. This process adheres to OMB procedures under the Paperwork Reduction Act, which aims to balance regulatory needs with administrative efficiency. As noted in the notice, "SBA is publishing this notice to allow all interested members of the public an additional 30 days to provide comments."
Potential Implications and Perspectives
In the short term, this reporting requirement could impose additional compliance costs on SBA lenders, potentially affecting small business lending efficiency. Lenders might need to review and document their decision-making processes to avoid accusations of politicized debanking, which could lead to more standardized risk assessments. Long-term implications include stronger protections for politically diverse businesses, but also risks of increased litigation if enforcement is seen as overreaching.
Different perspectives highlight the divide. Supporters, including some Republican lawmakers, argue that the order and its reporting mechanism are vital to prevent viewpoint discrimination, echoing sentiments from organizations like the National Rifle Association, which have reported debanking incidents. Critics, such as consumer advocacy groups and Democratic officials, contend that banks should retain discretion to manage risks, and that the order might undermine anti-money laundering efforts or environmental, social, and governance (ESG) considerations. For instance, a 2023 Brookings Institution analysis warned that restricting debanking could inadvertently shield high-risk actors. Legal precedents, like the Supreme Court's decision in West Virginia v. EPA (2022), which limited agency authority without clear congressional intent, could influence challenges to this order's implementation.
The forward-looking conclusion considers the trajectory of this initiative. As the comment period closes on January 5, 2026, OMB's decision could shape how the SBA enforces the Executive Order, potentially leading to revised guidance or further notices. Ongoing debates may focus on balancing fair access with financial stability, with possible congressional oversight or judicial review testing the order's bounds. Challenges include ensuring the reporting does not overly burden small lenders, while addressing concerns that it might politicize banking further. This development invites continued scrutiny from policymakers and stakeholders on the intersection of politics and finance.
