Author: Nic Carter
Translated by: Deep Tide TechFlow
This week, venture capitalist Marc Andreessen appeared on Joe Rogan's podcast and made some controversial remarks regarding the systemic phenomenon of 'debanking,' particularly in the crypto industry. He directly named the Consumer Financial Protection Bureau (CFPB) at the beginning of the show, claiming it is the behind-the-scenes force driving the debanking of crypto startups. The CFPB is an agency created under the leadership of Elizabeth Warren. In response, some critics countered that there is no such thing as a debanking problem, and in fact, the CFPB is working to end this phenomenon.
There are several different issues that need to be clarified. First, what exactly is Marc Andreessen complaining about? Are his concerns justified? Secondly, what role does the CFPB actually play in the debanking of politically unpopular entities—is it a promoter or a blocker?
For many leftists, they may not fully understand the crypto industry and the right's concerns regarding debanking. Therefore, following Marc's remarks and Elon's support on the X platform, the leftist camp generally feels confused or even disbelieving. I think it is first necessary to read the full content of the dialogue between Marc and Joe, as many people are reacting based on snippets, and this conversation actually contains many independent claims and in-depth comments. The full transcript can be found in the appendix. Let's explore further.
What is Marc Andreessen's main argument?
In the show, Marc made several interrelated claims. First, he criticized the CFPB as an almost unaccountable 'independent' federal agency that can 'intimidate financial institutions, preventing new competition, particularly those emerging startups trying to challenge the big banks.'
He went on to mention that debanking is a specific harm, defining it as 'when individuals or companies are completely kicked out of the banking system.' Marc pointed out that this phenomenon typically occurs through banks acting as agents (similar to how the government conducts indirect censorship through big tech), while the government maintains a certain distance to avoid direct liability.
Marc believes, 'Over the past four years, this situation has affected nearly all crypto entrepreneurs. This phenomenon has also impacted many fintech entrepreneurs and even anyone trying to launch new banking services, as the government attempts to protect existing large banks.' Additionally, Marc mentioned some politically unpopular businesses, such as the legitimate marijuana industry, the escort service industry, and gun stores and manufacturing during the Obama administration. The Department of Justice (DoJ) referred to these actions as 'Operation Choke Point.' Later, the crypto industry referred to similar phenomena as 'Operation Choke Point 2.0.' Marc stated that this action primarily targets political enemies of the government and the tech startups they do not support. 'Over the past four years, we have seen about 30 founders affected by debanking.'
Marc further pointed out that the victims include 'nearly all crypto founders and startups. They are either being individually debanked and forced out of the industry or having their company accounts closed, leading to an inability to operate, or even being prosecuted by the SEC or threatened with prosecution.'
Furthermore, Marc also mentioned that he knows of individuals who were debanked for 'holding unacceptable political views or making inappropriate comments.'
In summary, Marc Andreessen has made the following points:
Debanking refers to individuals or enterprises being deprived of banking services. This may be due to the political unpopularity of their industry or their holding dissenting political views.
The Consumer Financial Protection Bureau (CFPB) must bear some responsibility for this, along with other unnamed federal agencies involved.
The actual operation of this phenomenon is that regulatory agencies delegate the task of financial oppression to banks, thereby allowing the government to avoid direct responsibility.
During the Obama administration, the primary victims of debanking were some legitimate but politically unpopular industries, such as marijuana businesses, adult service industries, and gun stores and manufacturers.
During the Biden administration, cryptocurrency industry businesses and entrepreneurs, as well as fintech companies, have become the primary targets. Additionally, sometimes conservatives also face debanking due to their political views.
Marc also mentioned that 30 tech startup founders in the a16z portfolio had experienced debanking.
We will assess these views in detail at the end of the article.
How do critics view Marc Andreessen's perspective?
In simple terms, left-wing liberals are dissatisfied with Marc's remarks. They believe Marc is co-opting the narrative of 'debanking' to support the cryptocurrency and fintech industries while ignoring more deserving victims—such as Palestinians who were banned from GoFundMe for sending money to Gaza. The mainstream left tends to be more direct, usually supporting the debanking of their political opponents, thus preferring to avoid the entire issue.
However, there is a portion of the left that ideologically remains consistent in questioning the power of corporations and the government in the realms of speech and finance. (This group may be expanding, especially after the right regained control over some tech platforms and restored some state power.) These individuals have been vocal about the issue of debanking for some time. They recognize that while the current primary victims of debanking are right-wing dissidents (such as Kanye, Alex Jones, Nick Fuentes, etc.), this phenomenon could equally happen to the left if the situation were to reverse. They have a narrower definition of debanking: 'Debanking, or as some financial institutions call it, 'derisking,' refers to banks terminating business relationships with clients deemed politically incorrect, extreme, dangerous, or otherwise not conforming.' (Quoted from an article by TFP). In the article, Rupa Subramanya discusses how banks can completely destroy someone's financial life by deeming them to pose a high reputational risk. In fact, individuals from different political spectrums are affected—including Melania Trump, Mike Lindell, Trump himself, Christian charities, participants in the January 6th incident, as well as Muslim crowdfunding organizations and charities.
Nonetheless, many leftists remain critical of Marc's views, especially regarding the CFPB. Here are some specific examples:
Lee Fang: The CFPB has consistently opposed debanking; why would Andreessen say that? What evidence does he have? What he did not mention is that the CFPB investigated startups supported by Andreessen because they were suspected of deceiving consumers, not because of political speech. In fact, the root of debanking lies with the FBI and the Department of Homeland Security (DHS), not the CFPB.
Lee Fang: Debanking is indeed a serious issue. For example, we see truck drivers opposing the COVID vaccine mandate losing their bank accounts due to their activism, and organizations supporting Palestine being banned from using platforms like Venmo. But now, some predatory lenders and scammers are conflating consumer protection with 'debanking' to push for deregulation.
Jarod Facundo: I don't understand what @pmarca means at all. Just a few months ago, CFPB Director Chopra warned Wall Street against arbitrarily debanking conservatives at a Federalist Society event.
Jon Schweppe: I agree with @dorajfacundo. I completely don't understand what @pmarca is specifically referring to. The CFPB has been leading the charge against discriminatory debanking. What is going on here?
Ryan Grim: The CFPB recently released a very good new rule specifically targeting banks that debank users for political views. Yes, this is a leftist populist CFPB head standing up for the rights of conservatives. And now, those venture capitalists and Musk who dislike the CFPB are spreading lies, trying to incite public sentiment to undermine the CFPB's power.
Overall, these critics are not friendly toward the cryptocurrency and fintech industries. They argue that the companies in these sectors are not 'real' victims of debanking, especially compared to crowdfunding platforms sending money to Gaza. In their view, the crypto industry is 'getting what it deserves.' They believe that crypto founders are reckless with tokens and involved in fraud and scams, thus the banks' actions against them are justified. 'If crypto founders are debanked, that's just an issue of banking regulation, and it's none of our business.'
Additionally, these critics argue that Marc's mistake lies in blaming the CFPB. They assert that the CFPB is precisely an agency committed to combating debanking, and Marc's dissatisfaction with the CFPB is merely because the fintech platforms he invests in are under strict CFPB oversight to ensure that these platforms do not abuse consumer rights.
Since Marc's comments on Rogan's show, many founders in the tech and crypto industries have come forward to share their experiences of being unilaterally deprived of banking services. Some in the crypto industry believe that the unconstitutional attacks on the crypto industry's regulators are coming to an end, and they see a glimmer of hope. The call for investigations into 'Operation Choke Point 2.0' has also reached a climax. So, who is right? Is it Andreessen or his critics? Is the CFPB truly the culprit? Is the debanking phenomenon as severe as Marc claims? Let us begin exploring the role of the CFPB.
What is the CFPB?
The Consumer Financial Protection Bureau (CFPB) is an 'independent' agency established in 2011 under the Dodd-Frank Act after the financial crisis. Its responsibilities are very broad, including overseeing banks, credit card companies, fintech companies, payday lenders, debt collectors, and student loan companies. As an independent agency, the CFPB's funding does not rely on Congress (thus avoiding Congressional funding scrutiny). Its director cannot be easily dismissed by the president, and the agency can directly make rules and bring enforcement and legal cases in its own name. It can be said that the CFPB wields considerable power. The establishment of the CFPB was largely driven by Senator Elizabeth Warren.
The CFPB has consistently been a target for conservatives and libertarians because it is a new federal agency that operates with little oversight. It was established at the behest of Elizabeth Warren, who is a common target of right-wing criticism. The CFPB aims to effectively 'regulate' fintech companies and banks. However, most of these companies are already under strict regulation. For instance, banks must be overseen by state or federal (OCC) authorities, while also reporting to the FDIC, the Federal Reserve (Fed), and the SEC (if publicly traded). Credit unions, mortgage companies, and others also have their own regulatory agencies. Before the CFPB was established, there was no significant regulatory gap in U.S. financial oversight. In fact, the U.S. has more financial regulatory agencies than any other country in the world. Thus, the right's skepticism regarding Elizabeth Warren's motives is not without reason.
Regarding the responsibilities of the CFPB:
The CFPB's mandate includes some provisions that explicitly oppose discrimination in banking services. These include the Equal Credit Opportunity Act (ECOA) and the 'Unfair, Deceptive, or Abusive Acts or Practices' (UDAAP) section in the Dodd-Frank Act. Under ECOA, discrimination based on the following protected classes is prohibited in credit transactions: race, color, religion, nationality, sex, marital status, age, or whether the individual receives public assistance.
However, the 'Operation Choke Point' issue raised by Marc Andreessen does not fall within the scope of these regulations. 'Crypto entrepreneurs' or 'conservatives' do not belong to the legally defined protected classes. Thus, the CFPB's authority in this regard cannot address politically motivated crackdowns against specific industries, even in theory. Moreover, ECOA primarily pertains to credit services, not the broader issue of banking services.
The UDAAP section in the Dodd-Frank Act is another regulation that may involve debanking. This provision gives the CFPB broad powers to combat actions deemed unfair, deceptive, or abusive. For example, the massive settlement agreement the CFPB reached with Wells Fargo was based on UDAAP. Theoretically, if the CFPB were to address the issue of debanking, it could do so through UDAAP. However, apart from issuing some statements, they have yet to take any concrete action.
Official statements from the CFPB.
CFPB Director Rohit Chopra explicitly opposed the banning of users by payment platforms for political motives during a speech at a Federalist Society event in June this year. In his speech, he expressed concerns over large tech payment platforms (like PayPal and Venmo) irresponsibly banning users, especially when these platforms do not provide users any opportunity for appeal. He specifically mentioned that these platforms might exclude users because they expressed politically unpopular views elsewhere. This phenomenon does exist, so it is encouraging that Chopra can discuss these issues publicly.
However, there are two issues here.
First, Chopra's focus is primarily on the irresponsible actions of private enterprises, especially when these enterprises have monopolistic characteristics. He did not address the risks of governmental power, i.e., the possibility of the government forcing banks to implement 'redlining' against entire industries through regulatory tools. This is precisely the focus of Marc Andreessen's criticism.
Secondly, while Chopra's remarks are commendable, the CFPB's actual actions in this area have been limited. Based on current trends, they may regulate large non-bank payment networks. However, the issue of 'Operation Choke Point 2.0' relates more to the power exerted by the government through financial regulatory agencies over banks. Such issues do not fall within the CFPB's jurisdiction but are the responsibility of the Federal Reserve (Fed), the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the administrative departments responsible for regulating these agencies (or Congress in investigative cases). The CFPB does not have the authority to regulate other financial regulatory agencies, so its ability to address 'Operation Choke Point'-style behavior is limited. (However, it is worth mentioning that Chopra is a board member of the FDIC, so he bears some responsibility for, or at least has some knowledge of, the FDIC's misconduct.)
Notably, the CFPB explicitly stated in a court document this August that Christians being debanked is a form of discrimination and pointed out that the agency has the statutory authority to address this issue. This statement was seen by Lee Fang as a positive (and surprising) development, as the CFPB has not historically shown particular sympathy towards conservative groups. As previously mentioned, religious groups fall under the 'protected class' defined in the law, so there is little controversy over the CFPB intervening in financial exclusion against religious groups. However, we have yet to see the CFPB take similar actions against non-protected categories (such as ordinary conservatives or industries like cryptocurrency), which will be explored in the next section. Nonetheless, this move is undoubtedly a step in the right direction.
CFPB's actions.
Recently, the CFPB finalized a new rule that includes digital wallets and payment applications under its regulatory scope, treating them as bank-like entities. According to this rule, major digital payment platforms like Cash App, PayPal, Apple Pay, and Google Wallet are required to provide transparent explanations for account closures. In the rule announcement, the CFPB explicitly mentioned the phenomenon of 'debanking.' However, it is important to note that this rule applies to 'large tech companies' or peer-to-peer payment applications, not banks. As of now, there have been no enforcement actions regarding this rule, so we cannot yet assess its practical effectiveness.
So, will this rule curb behaviors similar to 'Operation Choke Point 2.0'? The answer is almost no. First, this rule only targets the behaviors of tech companies, not banks. Second, 'Operation Choke Point'-style behaviors are not decided by banks autonomously but are systemic pressures exerted by federal regulatory agencies through banks on entire industries. If the CFPB noticed, for example, that crypto startups were systematically cut off from banking services, they would have to confront the FDIC, the Fed, the OCC, and even the White House directly to halt such practices. However, considering Elizabeth Warren's strong opposition to cryptocurrency, one cannot help but wonder whether the CFPB would take such action. More importantly, the core issue of 'Operation Choke Point' is that banking regulatory agencies overstep legal boundaries, attempting to debank entire industries rather than individual banks' autonomous actions (banks merely passively execute the orders of regulatory agencies).
Theoretically, under UDAAP, if an industry (like cryptocurrency) experiences systemic account closures, the CFPB has the authority to investigate. However, the recently introduced payment application rules (which some critics of Marc Andreessen cite as evidence of the CFPB's anti-debanking stance) do not apply to banks. Furthermore, the CFPB has yet to take substantive action against debanking in its enforcement activities.
Main enforcement actions by the CFPB.
In the CFPB's enforcement records, I found no settlements directly related to debanking. Here are their top 30 settlements sorted by amount:
The closest relevant case is the 2023 Citigroup case. At that time, they were found to discriminate against Armenian Americans in credit card applications. According to Citigroup, this practice was due to a higher fraud rate in the Armenian community in California (caused by fraud rings). Ultimately, Citigroup paid a $25.9 million fine.
Another case is Townestone Financial in 2020. The CFPB found that the company discouraged Black Americans from applying for mortgages in its marketing and imposed a $105,000 fine.
It should be noted that nationality and race fall under the 'protected class' defined in U.S. law, so these cases do not involve purely political 'redlining.' This is fundamentally different from the critics' accusations of debanking in the cryptocurrency industry.
Additionally, I reviewed the last 50 settlement cases from the CFPB since March 2016 but found no cases involving the arbitrary deprivation of banking services. Among these 50 cases, 15 involved UDAAP violations (like the infamous Wells Fargo case), 8 involved fair lending violations, 5 involved student loan servicing, 5 involved inaccuracies in credit reporting, 5 involved mortgage servicing, 4 involved auto loan discrimination, and 3 involved illegal overdraft practices. As for the issue of debanking: there was not a single case.
Criticism of Marc regarding the debanking of crypto/fintech companies and conservatives.
On this issue, the situation is very clear. I have documented in detail the phenomenon of so-called 'Operation Choke Point 2.0.' This practice originated during the Obama administration and reappeared during the Biden administration. In 2013, the Obama Department of Justice launched the 'Operation Choke Point' initiative, an official program aimed at targeting some legitimate but politically unpopular industries, such as payday lending, medical marijuana, adult industries, and gun manufacturers. Iain Murray discussed this in detail in his article (Operation Choke Point: What It Is and Why It Matters).
During the Obama administration, the FDIC, under the leadership of Marty Gruenberg, persuaded banks to 'derisk' companies in more than a dozen industries through insinuation and threats. This practice provoked strong protests from conservatives and was exposed by members of the House under Congressman Luetkemeyer’s leadership. Critics argue that such secret regulation conducted through 'persuasion' is unconstitutional because it was not carried out through formal rule-making or legislative procedures.
In 2014, a Department of Justice memo on this practice was leaked, and subsequently, the House Oversight and Government Reform Committee released a critical report. The FDIC then issued new guidance requiring banks to assess risks on a case-by-case basis rather than applying 'redlining' to entire industries. In August 2017, the Trump administration's Department of Justice officially terminated this practice. In 2020, Trump’s Comptroller of the Currency Brian Brooks issued the 'Fair Access' rule aimed at terminating debanking practices based on reputational risk.
However, in May 2021, Biden's acting Comptroller of the Currency Michael Hsu revoked this rule. At the beginning of 2023, following the collapse of FTX, individuals in the crypto industry, including myself, noticed that similar 'choke point' strategies were being implemented against crypto founders and companies. In March 2023, I published an article (Operation Choke Point 2.0 is underway, cryptocurrency is the target) and followed up with another article in May that revealed more new information.
Specifically, I found that the FDIC and other financial regulatory agencies secretly imposed a '15% deposit cap' policy on banks regarding crypto-related companies. This means that banks are prohibited from accepting deposits from crypto-related enterprises that exceed 15% of their total deposits. Furthermore, I believe that the two banks within the crypto industry, Silvergate and Signature, did not collapse due to market reasons but were forced to liquidate or shut down due to the government's hostile attitude towards the crypto industry.
Since then, cryptocurrency companies continue to face significant difficulties in obtaining banking services—despite no public regulations or legislation explicitly requiring banks to limit services to crypto enterprises. The law firm Cooper and Kirk pointed out that the practices of 'Operation Choke Point 2.0' violate the Constitution.
Recently, I re-investigated this phenomenon and found new evidence suggesting that Silvergate Bank did not naturally collapse but was 'intentionally executed.'
(See tweet for details)
Currently, the '15% deposit cap' policy targeting cryptocurrency banks still exists, severely limiting industry development. Almost all domestic cryptocurrency entrepreneurs have been affected by this—I can confirm that around 80 crypto companies we invest in have faced similar issues. Even my company Castle Island (a venture capital fund that only invests in fiat-related businesses) has experienced sudden account closures.
After Marc appeared on Rogan's show, many executives in the crypto industry also shared their experiences. David Marcus revealed that Facebook's Libra project was forced to shut down due to intervention from Janet Yellen. Kraken CEO Jesse Powell, Joey Krug, Gemini's CEO Cameron Winklevoss, Visa's Terry Angelos, and Coinfund's Jake Brukhman also stated that their companies faced serious obstacles in banking services. Caitlin Long has long publicly opposed 'Operation Choke Point 2.0' and even started her own bank, Custodia, but Custodia was denied a Master Account by the Federal Reserve, preventing it from operating normally.
Although critics may lack sympathy for the crypto industry, it must be acknowledged that the crypto industry is a completely legitimate sector that has been suppressed due to secret directives and insinuations from banking regulatory agencies. This suppression is not carried out through legislation or public rule-making but is operated behind the scenes by administrative agencies, circumventing democratic processes.
Not only the cryptocurrency industry, but fintech companies are also facing similar dilemmas. According to research from Klaros Group, since the beginning of 2023, a quarter of the FDIC's enforcement actions have been against banks partnering with fintech companies, while non-fintech partner banks account for only 1.8%. As an investor in the fintech sector, I can personally attest that fintech companies are facing enormous difficulties in finding banking partners, a challenge that is nearly comparable to that faced by cryptocurrency companies in obtaining banking services.
(The Wall Street Journal) criticized the FDIC's actions, pointing out that the agency 'is essentially making rules while circumventing the notice and public comment phases required by the Administrative Procedure Act.' This behavior not only causes substantial harm to the industry but also raises widespread questions about its legality.
Andreessen mentioned that there is indeed substantial evidence supporting the issue of conservatives being debanked. For example, Melania Trump mentioned in her recent memoir that her bank canceled her account. The right-wing speech platform Gab.ai has also faced similar issues. In 2021, General Michael Flynn had his account closed by JPMorgan Chase due to perceived 'reputational risk.' In 2020, Bank of America closed the account of the Christian nonprofit Timothy Two Project International and froze the account of Christian pastor Lance Wallnau in 2023. In the UK, Nigel Farage was debanked by Coutts/NatWest, an event that even sparked a small public outcry. These are just a few examples among many.
According to current law, banks in the United States have the right to close accounts for any reason without providing an explanation to customers. Therefore, substantively, Andreessen's point is correct: the phenomenon of debanking does exist and has far-reaching effects.
The controversy surrounding the term 'debanking.'
Critics argue that Andreessen is attempting to use the concept of 'debanking' to promote his own economic agenda. Some point out that his motivation for focusing on this issue is to alleviate regulatory pressure on the cryptocurrency and fintech industries. Lee Fang mentioned:
'Debanking is indeed an important issue. We see truck drivers opposing COVID vaccine mandates losing their bank accounts due to their activism, and organizations supporting Palestine being banned from using payment platforms like Venmo. But now, some predatory lenders and fraudsters are conflating consumer protection with 'debanking' to call for deregulation.'
Additionally, the Axios author hinted that the issue with the Consumer Financial Protection Bureau (CFPB) that Andreessen focuses on may relate to his company's investments in some controversial new banks, such as Synapse, which collapsed earlier this year. This criticism suggests that Andreessen's focus on 'debanking' is to promote the interests of the cryptocurrency and fintech industries while evading the CFPB's consumer protection oversight.
Although the critics' points may sound logical, the reality is more complex. Historically, the Obama administration did develop strategies to use banking regulation to suppress certain industries (like gun manufacturing and payday lending), which were deemed unconstitutional. The Biden administration further optimized these strategies and effectively used them to crack down on the cryptocurrency industry. For instance, by pressuring partner banks, the government indirectly restricted banking services for cryptocurrency companies. These practices were not enacted through legislation or public rule-making but were operated behind the scenes via administrative means, circumventing democratic processes.
Currently, this strategy is also beginning to target the fintech industry. According to research from Klaros Group, since early 2023, a quarter of the FDIC's enforcement actions have been against banks partnering with fintech companies, while only 1.8% of non-fintech partner banks have been affected. As an investor in the fintech sector, I can personally feel that this practice has led fintech companies to face enormous difficulties in finding banking partners, almost equivalent to the challenges faced by cryptocurrency companies in obtaining banking services.
These phenomena indicate that the power of administrative agencies has exceeded its boundaries, causing serious impacts on multiple legitimate industries. Whether in cryptocurrency or fintech, a more transparent and democratic regulatory approach is needed, rather than relying on secret directives and vague policy enforcement. In the future, as regulatory policies adjust, these issues may be gradually exposed and corrected.
Whether commentators like Fang believe that the Biden administration's debanking actions against cryptocurrency companies weaken his moral criticism of the debanking of more sympathetic groups is not the point. The fact is, this phenomenon is indeed happening, and it is illegal. Similarly, whether Marc Andreessen's criticism of the CFPB is economically motivated is also irrelevant. (According to my investigation, so far, the CFPB has not taken any enforcement action against any of the companies invested in by Andreessen's venture capital firm a16z.)
Importantly, banking regulatory agencies (not just the CFPB, but several agencies) have indeed weaponized financial systems to achieve political purposes. This behavior has far exceeded the authorized boundaries of executive power, causing harassment to legitimate industries. The fact is that such overreach does exist.
An assessment of Andreessen's views on Rogan's show.
Based on a comprehensive analysis, we can evaluate Andreessen's arguments point by point:
Debanking refers to individuals or businesses being deprived of banking services due to their industry's political unpopularity or their dissenting political views.
This definition is spot on. Importantly, the severity of debanking should not change based on whether the victims meet someone's sympathy standards.
The CFPB does indeed often apply high-pressure policies against fintech companies and banks, and its necessity is questionable.
But based on existing information, the CFPB is not the primary responsible party for 'Operation Choke Point 2.0.' The more direct responsible parties are the FDIC, OCC, and the Federal Reserve, which coordinated actions with the Biden administration. Although the CFPB has recently made statements on the issue of debanking, it has not taken concrete action, so it has neither alleviated the issue nor is it the main responsible party.
The core of debanking lies in regulators using banks to enforce financial oppression, thereby avoiding direct governmental responsibility.
This pattern is similar to how large tech companies censor dissenters. By having banks or fintech platforms refuse service, it effectively suppresses 'regime enemies' while avoiding excessive external scrutiny.
The 'Operation Chokepoint' during the Obama administration focused on cracking down on certain legitimate but unpopular industries, including marijuana companies, adult industries, and gun stores and manufacturers.
This description is accurate. In fact, this action initially began in the payday lending industry, but Andreessen did not mention this.
The Biden administration's debanking actions primarily target cryptocurrency companies and fintech firms, while occasionally involving conservatives.
Both points are true. We have more evidence that the crackdown on the crypto industry is a coordinated effort, and while evidence is scant for the fintech industry, the FDIC has indirectly pressured partner banks through enforcement actions. As for conservatives being debanked, we have a lot of anecdotal evidence, but no internal banking policies explicitly state cases targeting conservatives. Such actions are usually justified by 'reputational risk' and decided on a case-by-case basis. Ultimately, banks are completely black boxes; they are not required to provide reasons for reducing the risks of individuals or companies.
Founders in the a16z portfolio are being debanked.
Based on existing information, it is entirely possible, even highly likely, that 30 tech founders in the a16z portfolio have been debanked. As an active investor in cryptocurrency, a16z has many investment projects related to crypto, and almost all domestic crypto startups have faced banking service issues at some point.
Where is Marc's mistake?
Marc somewhat exaggerates the role of the CFPB. The recent crackdown on the cryptocurrency and fintech industries has actually been more led by regulatory agencies such as the FDIC, OCC, and the Federal Reserve, rather than the CFPB. However, Marc did mention that some unspecified 'agencies' were involved in the debanking, even though he did not specifically name the FDIC, OCC, or the Federal Reserve. Moreover, the influence of CFPB founder Elizabeth Warren on this matter cannot be ignored. She is one of the main proponents of 'Operation Choke Point 2.0,' particularly through her appointee Bharat Ramamurti, who has led related actions in the Biden administration's National Economic Council. Therefore, it is understandable that Marc amplifies the responsibility of the CFPB.
Marc's discussion of PEPs is somewhat one-sided. Being classified as a politically sensitive person does not directly lead to account closures, but it does increase banks' due diligence requirements for these clients. Marc may have been inspired by Nigel Farage's debanking incident with Coutts. In this case, Nigel was considered a PEP, which indeed was a contributing factor, but not the only reason.
Despite some details being off, Marc's main point is correct, and the critics' rebuttals do not hold up. The CFPB has not yet become an effective force against debanking, and the phenomenon of debanking does exist, with particularly pronounced effects on the cryptocurrency and fintech industries. As Republicans gain control of Congress and launch related investigations, more evidence is expected to reveal the true scale and mechanisms of debanking.