Original Author: Nic Carter
Original Translation: Shen Chao TechFlow
This week, venture capitalist Marc Andreessen appeared on Joe Rogan's podcast and made some controversial statements regarding the systemic phenomenon of 'debanking,' particularly concerning the cryptocurrency industry. At the beginning of the episode, he directly named the Consumer Financial Protection Bureau (CFPB) as the behind-the-scenes perpetrator of the debanking faced by crypto startups. The CFPB is an agency founded by Elizabeth Warren. In response, some critics rebutted that not only is there no so-called debanking issue, but the CFPB is actually working to end this phenomenon.
There are several different issues that need to be clarified here. First, what exactly is Marc Andreessen complaining about? Are his concerns justified? Secondly, what role has the CFPB played in the debanking of politically unpopular entities—is it a promoter or a blocker?
For many leftists, they may not fully understand the cryptocurrency industry and the right's concerns regarding debanking. Therefore, after Marc's remarks and Elon’s support on the X platform, the left generally feels confused or even disbelieving. I think it is first necessary to read the full dialogue between Marc and Joe because many people are reacting based on snippets, while this dialogue actually contains many independent claims and in-depth comments. For the complete transcript, see the appendix. Now let's explore in detail.
What is Marc Andreessen's main point?
During the program, Marc raised several interrelated claims. He first criticized the CFPB as an almost unmonitored 'independent' federal agency that is capable of 'intimidating financial institutions, preventing new competition, especially those emerging startups trying to challenge the big banks.'
Subsequently, he defined debanking as a specific harm, stating that it occurs '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 government indirect censorship through large tech companies), while the government maintains a certain distance to avoid direct responsibility.
Marc believes, 'This situation has affected almost all crypto entrepreneurs in the past four years. 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 cannabis industry, adult services, and gun stores and manufacturers during the Obama administration. The Department of Justice (DoJ) referred to these actions as 'Operation Choke Point.' Later, the cryptocurrency industry referred to similar phenomena as 'Choke Point 2.0.' Marc stated that this action mainly targets the government's political enemies and the tech startups they do not support. 'In the past four years, we've seen about 30 founders affected by debanking.'
Marc further pointed out that victims include 'almost all crypto founders and startups. They have either been individually debanked, forced out of the industry, or had their corporate accounts closed, leading to an inability to operate, even facing lawsuits from the SEC or threats of being sued.'
Additionally, Marc mentioned that he knows of some individuals who have faced debanking due to 'holding unacceptable political views or making inappropriate comments.'
In summary, Marc Andreessen has made the following points:
Debanking refers to individuals or businesses being deprived of banking services. This may occur because their industry is politically unpopular or because they hold political views that differ from the mainstream.
The Consumer Financial Protection Bureau (CFPB) should bear some responsibility for this, along with other unspecified federal agencies involved.
The practical operation of this phenomenon is that regulatory agencies delegate the task of financial oppression to banks, 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 cannabis businesses, adult services, and gun stores and manufacturers.
During the Biden administration, businesses and entrepreneurs in the cryptocurrency industry, as well as fintech companies, have become primary targets. Furthermore, at times, conservatives also face debanking due to their political views.
Marc also mentioned that the 30 tech startup founders in the a16z portfolio have faced debanking.
We will evaluate these viewpoints in detail at the end of the article.
How do critics view Marc Andreessen's points?
In simple terms, leftist liberals are dissatisfied with Marc's comments. They believe Marc is co-opting the narrative of 'debanking' to support the interests of 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 tending to avoid the entire issue.
However, there is also a segment on the left that ideologically remains consistent in questioning the power of corporations and government in speech and finance. (This group may be expanding, especially as the right regains control over some tech platforms and restores some state power.) These individuals have been vocal about the issue of debanking for some time. They recognize that although the main victims of debanking currently are right-wing dissenters (such as Kanye, Alex Jones, Nick Fuentes, etc.), this phenomenon could equally happen to the left if the situation were reversed. They have a more narrow definition of debanking: 'Debanking, or as some financial institutions call it, 'derisking,' refers to banks terminating business relationships with clients seen as politically incorrect, extreme, dangerous, or otherwise noncompliant.' (Quoted from an article by TFP). In this article, Rupa Subramanya discusses how banks can completely destroy someone's financial life by deeming them to pose excessive reputational risk. In fact, people from different political spectra are affected—including Melania Trump, Mike Lindell, Donald Trump himself, Christian charities, participants of the January 6 incident, and Muslim crowdfunding organizations and charities.
Nevertheless, many leftists remain critical of Marc's viewpoints, especially regarding the CFPB. Here are some specific examples:
Lee Fang: The CFPB has consistently opposed debanking; why would Andreessen say so? What evidence does he have? What he doesn't 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 DHS, rather than the CFPB.
Lee Fang: Debanking is indeed a serious issue. For instance, we have seen truck drivers opposing COVID prevention policies lose their bank accounts due to their participation in protests, and organizations supporting Palestine have been banned from using Venmo. But now, some predatory lenders and scammers are conflating consumer protection with 'debanking' in attempts to advocate for deregulation.
Jarod Facundo: I completely do not understand @pmarca's point. A few months ago, CFPB Director Chopra warned Wall Street not to debank conservatives without justification at a Federalist Society event.
Jon Schweppe: I agree with @dorajfacundo's viewpoint. I completely do not understand what @pmarca is specifically referring to. The CFPB has been leading the opposition against discriminatory debanking. What is this all about?
Ryan Grim: The CFPB recently issued a very good new rule specifically targeting banks that debank users due to political views. Yes, this is a leftist populist CFPB head standing up for conservative rights. And now, those venture capitalists and Musk who dislike the CFPB are spreading lies, trying to stir public sentiment to weaken the CFPB's power.
Overall, these critics are not friendly to the cryptocurrency and fintech industries. They argue that these companies are not 'real' victims of debanking, especially when compared to crowdfunding platforms sending money to Gaza. In their view, the cryptocurrency industry 'brought it upon itself.' They believe that cryptocurrency founders are issuing tokens indiscriminately, engaging in fraud and deception, and thus it is reasonable for banks to take action against them. 'If crypto founders are debanked, that is simply a banking regulatory issue, and it has nothing to do with us.'
Additionally, these critics argue that Marc's error lies in attributing responsibility to the CFPB. They assert that the CFPB is precisely an agency dedicated to combating debanking, and Marc's dissatisfaction with the CFPB is simply because the fintech platforms he invests in are rigorously regulated by the CFPB to ensure they do not abuse consumer rights.
Since Marc made his statements on Rogan's show, many founders in the tech and cryptocurrency industries have come forward to share their experiences of being unilaterally deprived of banking services. Some in the cryptocurrency industry believe that the unconstitutional attacks on the industry by regulatory agencies are about to end, and they see a glimmer of hope. Calls for investigations into 'Choke Point 2.0' have also reached a peak. So, who is right? Is it Andreessen or his critics? Is the CFPB truly the culprit? Is the phenomenon of debanking really as severe as Marc claims? Let's start by examining 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 in response to the financial crisis. Its scope of responsibilities is very broad, including oversight of 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 create rules and initiate enforcement and legal actions in its own name. It can be said that the CFPB wields considerable power. The establishment of the CFPB was primarily promoted by Senator Elizabeth Warren.
The CFPB has been a target of attack from conservatives and libertarians because it is a new federal agency that is almost unmonitored. It was established at the behest of Elizabeth Warren, who is a frequent target of right-wing criticism. The CFPB's goal is effectively to 'regulate' fintech companies and banks. However, most of these companies are already subject to stringent regulations. For example, banks are required to be supervised by state or federal (OCC) regulators, and they must report to the FDIC, the Federal Reserve (Fed), and the SEC (if they are publicly traded). Credit unions, mortgage institutions, and others also have their own regulatory agencies. There was no significant gap in financial regulation in the U.S. before the CFPB was established. In fact, the U.S. has more financial regulatory agencies than any other country in the world. Therefore, the right's skepticism about Elizabeth Warren's motives is not without reason.
On the scope of CFPB's responsibilities:
The CFPB's authorization includes several provisions explicitly opposing discrimination in banking services. These include the Equal Credit Opportunity Act (ECOA) and the 'Unfair, Deceptive, or Abusive Acts or Practices' (UDAAP) provisions in the Dodd-Frank Act. According to the ECOA, discrimination based on the following protected classes is prohibited in credit transactions: race, color, religion, nationality, sex, marital status, age, or receiving public assistance.
However, the issue of 'Choke Point' as raised by Marc Andreessen does not actually fall within the scope of these regulations. 'Crypto entrepreneurs' or 'conservatives' do not belong to the legally defined protected classes. Therefore, this part of the CFPB's authorization cannot theoretically address politically motivated actions against specific industries. Moreover, ECOA mainly targets credit services, rather than the overall issue of banking services.
The UDAAP provisions in the Dodd-Frank Act represent another potential regulation related to debanking. This clause grants the CFPB broad authority to combat actions deemed unfair, deceptive, or abusive. For example, the massive settlement agreement with Wells Fargo was based on UDAAP. In theory, if the CFPB were to address debanking, it could do so through UDAAP. However, apart from issuing some statements, they have not taken any practical action thus far.
CFPB's Official Statement
CFPB Director Rohit Chopra clearly 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 concern about large tech payment platforms (like PayPal and Venmo) irresponsibly banning users, especially when these platforms provide no opportunity for users to appeal. He specifically mentioned that these platforms might exclude users due to politically unpopular views expressed elsewhere. This phenomenon does exist, so it is encouraging that Chopra can publicly discuss these issues.
However, there are two issues at play here.
First, Chopra's focus is mainly on the irresponsible behavior of private enterprises, especially when these enterprises have monopolistic characteristics. He does not address the risks of governmental power, i.e., the possibility that the government could use regulatory tools to compel banks to implement 'redlining' against entire industries. 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 remain limited. Based on current trends, they may regulate large non-bank payment networks. However, the issue of 'Choke Point 2.0' involves more the power the government exerts over banks through financial regulatory agencies. Such issues are not within the CFPB's scope 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 executive branch responsible for regulating these agencies (or Congress in investigative cases). The CFPB does not have the authority to regulate other financial regulatory agencies, so their ability to address 'Choke Point'-style behaviors is limited. (It is worth mentioning that Chopra is a board member of the FDIC, so he bears some responsibility for, or at least awareness of, some of the FDIC's misconduct.)
It is noteworthy that 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 legal authority to address this issue. This statement was seen by Lee Fang as a positive (and surprising) development since the CFPB has not shown particular sympathy towards conservative groups. As mentioned earlier, religious groups fall under the legal definition of 'protected classes,' so there is not much 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 classes (like ordinary conservatives or industries like cryptocurrency), which will be detailed in the next section. Nevertheless, this move is undoubtedly a step in the right direction.
CFPB's Actions
Recently, the CFPB finalized a new rule bringing digital wallets and payment applications under its regulatory umbrella, treating them as akin to banking institutions. According to this rule, large digital payment platforms, including 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 should be noted that this rule applies to 'large tech companies' or peer-to-peer payment applications, not banks. No enforcement actions have yet been taken under this rule, so we cannot yet assess its effectiveness in practice.
So, can this rule curb behaviors similar to 'Operation Choke Point 2.0'? The answer is almost no. First, this rule only targets the actions of tech companies, not banks. Secondly, 'Choke Point'-like behavior is not autonomously decided by banks but is systemic pressure imposed by federal regulatory agencies on the entire industry through banks. If the CFPB notices, for instance, that cryptocurrency startups are being systematically cut off from banking services, they would have to confront the FDIC, the Federal Reserve (Fed), the OCC, and even the White House directly to terminate such practices. However, considering Elizabeth Warren's strong opposition to cryptocurrencies, one cannot help but question whether the CFPB would take such action. More importantly, the fundamental issue of 'Choke Point' is that banking regulatory agencies exceed legal boundaries, attempting to debank entire industries rather than individual banks' autonomous actions (banks merely passively execute the orders of regulatory agencies).
Theoretically, according to UDAAP provisions, if an industry (like cryptocurrency) experiences systemic account closures, the CFPB has the authority to investigate this. However, the recently introduced payment application rules (some critics of Marc Andreessen cite this rule to prove the CFPB's anti-debanking stance) do not apply to banks. Moreover, the CFPB has yet to take substantial action against the issue of debanking in its actual enforcement activities.
About the CFPB's Major Enforcement Actions
In the CFPB's enforcement records, I found no settlement cases directly related to debanking. Here are the top 30 settlements sorted by amount:
The most relevant case is the 2023 Citigroup case. At that time, they were found to have discriminatory practices against Armenian Americans in credit card applications. According to Citigroup, this practice was due to a higher fraud rate in California's Armenian community (triggered by fraud rings). Ultimately, Citigroup paid a $25.9 million fine.
Another case is the 2020 Townestone Financial case. The CFPB found that the company discouraged African Americans from applying for mortgages in its marketing and paid a $105,000 fine as a result.
It is important to note that nationality and race are defined as 'protected classes' under U.S. law, so these cases do not involve purely politically motivated 'redlining.' This is fundamentally different from critics' charges of debanking in the cryptocurrency industry.
Moreover, I also reviewed the most recent 50 settlement cases from the CFPB since March 2016 and found no cases involving the arbitrary deprivation of banking services. Among these 50 cases, 15 involved UDAAP violations (such as the well-known Wells Fargo case), 8 involved fair lending violations, 5 involved student loan servicing, 5 involved inaccurate credit reporting issues, 5 involved mortgage servicing, 4 involved auto loan discrimination, and 3 involved illegal overdraft activities. As for the issue of debanking: none were involved.
On Marc's criticisms of debanking faced by cryptocurrency/fintech companies and conservatives
In this matter, the situation is very clear. I have documented in detail the phenomenon of 'Operation Choke Point 2.0.' This practice originated in the Obama administration and re-emerged during the Biden administration. In 2013, Obama's Department of Justice launched the 'Operation Choke Point' program, which was an official initiative designed to suppress certain 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 Marty Gruenberg's leadership, persuaded banks to 'derisk' companies from more than a dozen industries through insinuation and threats. This practice sparked strong protests from conservatives and was exposed by members of the House led by Rep. Luetkemeyer. Critics argue that this secret regulation through 'persuasion' is unconstitutional as it did not go through formal rule-making or legislative processes.
In 2014, a Department of Justice memo on this practice was leaked, which was followed by a critical report from the House Oversight and Government Reform Committee. The FDIC subsequently issued new guidance requiring banks to assess risks on a case-by-case basis rather than implementing 'redlining' across the entire industry. In August 2017, the Trump administration's Department of Justice formally terminated this practice. In 2020, Brian Brooks, the acting Comptroller of the Currency under Trump, issued the 'Fair Access' rule aimed at ending reputation-risk-based debanking.
However, in May 2021, Biden's acting Comptroller of the Currency Michael Hsu rescinded this rule. At the beginning of 2023, following the collapse of FTX, individuals in the cryptocurrency industry, including myself, noticed that similar 'Choke Point' strategies were being implemented against cryptocurrency founders and companies. In March 2023, I published an article (Choke Point 2.0 is Underway, Cryptocurrency is the Target) and a follow-up article in May revealing more new developments.
Specifically, I found that the FDIC and other financial regulatory agencies secretly imposed a '15% deposit cap' policy on banks targeting cryptocurrency-related companies. This means that banks are not allowed to accept deposits from crypto-related businesses that exceed 15% of their total deposits. Furthermore, I believe that the two banks in the cryptocurrency industry, Silvergate and Signature, did not fail due to market reasons, but were forced to liquidate or shut down due to the government's hostile attitude towards the cryptocurrency industry.
Since then, cryptocurrency companies have continued 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 'Choke Point 2.0' violate the Constitution.
Recently, I re-investigated this phenomenon and found new evidence suggesting that Silvergate Bank did not fail naturally but was 'intentionally executed.'
(See tweet for details)
Currently, the '15% deposit cap' policy targeting cryptocurrency banks still exists, severely limiting the industry's development. Almost all domestic crypto entrepreneurs have been affected by this— I can confirm that about 80 crypto companies we invested 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's appearance on Rogan's show, many executives in the cryptocurrency industry also shared their experiences. David Marcus revealed that Facebook's Libra project was forced to shut down due to Janet Yellen's intervention. 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 severe barriers in banking services. Caitlin Long has long publicly opposed 'Choke Point 2.0,' even founding her own bank, Custodia, but Custodia was denied a master account by the Federal Reserve and was unable to operate normally.
Although critics may lack sympathy for the cryptocurrency industry, it must be acknowledged that the cryptocurrency industry is a fully legitimate sector that has been suppressed due to secret directives and insinuations from banking regulators. This suppression is not carried out through legislation or public rule-making but is executed 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 by Klaros Group, a quarter of the FDIC's enforcement actions since the beginning of 2023 have targeted banks partnering with fintech companies, while only 1.8% were against non-fintech partner banks. As an investor in the fintech space, I can personally attest to the immense difficulties fintech companies face in seeking banking partners, challenges that can almost rival those of crypto 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 requirements mandated by the Administrative Procedure Act.' Such behaviors not only cause substantial harm to the industry but also raise widespread questions about their legitimacy.
Andreessen's mention of conservatives being debanked indeed has ample instances to support it. For example, Melania Trump mentioned in her recent memoir that her bank account was canceled. The right-wing speech platform Gab.ai also faced similar issues. In 2021, General Michael Flynn had his account closed by JPMorgan due to perceived 'reputational risk.' In 2020, Bank of America closed accounts for 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 minor public uproar. These are just a few examples among many.
Under current law, banks in the U.S. have the right to close accounts for any reason and do not have to provide explanations to customers. Therefore, substantively speaking, Andreessen's point is correct: the phenomenon of debanking does indeed exist and has far-reaching effects.
The Controversy over the Term 'Debanking'
Critics argue that Andreessen is trying to use the concept of 'debanking' to push his own economic agenda. Some suggest that his motivation for focusing on this issue is to alleviate regulatory pressures on the cryptocurrency and fintech industries. Lee Fang mentioned:
'Debanking is indeed an important issue. We see that truck drivers opposing COVID vaccine mandates have lost their bank accounts due to their activism, and organizations supporting Palestine are unable to use payment platforms like Venmo. Yet now, some predatory lenders and scammers are conflating consumer protection with 'debanking' as a call for deregulation.'
Additionally, Axios authors have suggested that the CFPB issue Andreessen is concerned about may relate to his company's investment in some controversial new banks, such as Synapse, which collapsed earlier this year. This criticism implies that Andreessen focuses solely on 'debanking' to promote the interests of the cryptocurrency and fintech industries while evading the CFPB's consumer protection regulations.
Despite critics' views sounding logical, the reality is more complex. Historically, the Obama administration did indeed 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 suppress the cryptocurrency industry. For example, by pressuring partner banks, the government indirectly restricted banking services for cryptocurrency companies. These practices were not carried out through legislation or public rule-making but were executed behind the scenes by administrative means, circumventing democratic processes.
Currently, this strategy is also starting to target the fintech industry. According to research by Klaros Group, a quarter of the FDIC's enforcement actions since the beginning of 2023 have targeted banks partnering with fintech companies, while the proportion of non-fintech partner banks is only 1.8%. As an investor in the fintech space, I can personally feel that this practice has made it extremely difficult for fintech companies to seek banking partners, almost comparable to the challenges faced by cryptocurrency companies in obtaining banking services.
These phenomena indicate that the power of administrative agencies has exceeded its bounds and has severely impacted multiple legitimate industries. Whether in the cryptocurrency or fintech industries, there is a need for more transparent and democratic regulatory approaches rather than relying on secret directives and vague policy enforcement. In the future, as regulatory policies adjust, these issues may gradually be revealed and corrected.
Whether commentators like Fang believe that the Biden administration's debanking actions against cryptocurrency companies undermine his moral critique of the debanking of more sympathetic groups is not the point. The fact is that this phenomenon does occur, which is debanking, and it is illegal. Similarly, whether Marc Andreessen's criticism of the CFPB is economically motivated is also irrelevant. (According to my investigation, thus far, the CFPB has not taken any enforcement actions against any of the businesses invested in by Andreessen's venture capital firm a16z.)
Importantly, banking regulatory agencies (not just the CFPB, but multiple agencies) have indeed instrumentalized the financial system to achieve political ends. This behavior has far exceeded the authorized limits of administrative power and has harassed legitimate industries. The fact is that such overreach does exist.
Evaluation of Andreessen's points 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 being politically unpopular or because they hold dissenting political views.
This definition is accurate. Importantly, the severity of debanking should not change based on whether the victims meet certain people's sympathy standards.
The CFPB does indeed often apply pressure policies on fintech companies and banks, and its necessity is worth questioning.
However, based on current information, the CFPB is not the main responsible party for 'Choke Point 2.0.' The more direct responsible parties are the FDIC, OCC, and the Federal Reserve, which coordinated actions with the Biden administration. While the CFPB has recently made statements regarding debanking, it has not taken concrete actions, thus neither alleviating the problem nor being the main responsible party.
The core of debanking lies in regulatory agencies avoiding direct governmental responsibility by having banks execute financial suppression.
This model is similar to how large tech companies suppress dissenters through censorship. By having banks or fintech platforms refuse service, it effectively suppresses 'regime enemies' while avoiding excessive external scrutiny.
The 'Operation Choke Point' during the Obama administration primarily targeted legitimate but unpopular industries, including cannabis companies, the adult industry, 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 actions regarding debanking primarily target cryptocurrency companies and fintech enterprises, while occasionally involving conservatives.
Both points are true. We have more evidence indicating that the crackdown on the cryptocurrency industry is a coordinated action, while actions against the fintech industry, though less evidenced, have also indirectly pressured partner banks through FDIC enforcement actions. As for conservatives being debanked, we have ample anecdotal evidence, but there are no internal bank policies explicitly stating cases targeting conservatives. Such actions are often justified on the grounds of 'reputational risk' and decided on a case-by-case basis. Ultimately, banks are completely opaque; they are not required to provide reasons for lowering individual or company risks.
Founders in the a16z portfolio have faced debanking.
Based on current information, it is entirely possible, even highly likely, that 30 tech founders in the a16z portfolio have faced debanking. As an active cryptocurrency investment firm, many of a16z's investment projects involve cryptocurrencies, and almost all domestic crypto startups have faced banking service issues at some point.
Where did Marc go wrong?
Marc's description of the CFPB's role is somewhat exaggerated. The recent crackdown on the cryptocurrency and fintech industries is actually more led by regulatory agencies like the FDIC, OCC, and the Federal Reserve rather than the CFPB. However, Marc did mention in the program that some unspecified 'agencies' were involved in debanking, even though he did not specifically name the FDIC, OCC, or Federal Reserve. Additionally, the influence of CFPB's founder, Elizabeth Warren, on this matter cannot be overlooked. She is one of the main proponents of 'Choke Point 2.0,' especially with her appointee Bharat Ramamurti leading related actions in the Biden administration's National Economic Council. Therefore, it can be understood why Marc amplifies the responsibilities of the CFPB.
Marc's discussion of PEPs (Politically Exposed Persons) is somewhat one-sided. Being classified as a politically sensitive person does not directly lead to bank account closures, but it does increase the due diligence requirements that banks impose on these clients. Marc may have been inspired by the case where Nigel Farage was debanked by Coutts. In that case, Nigel was considered a PEP, which was indeed a contributing factor, but not the only reason.
Despite some minor discrepancies, Marc's main point is correct, and the critics' rebuttals are untenable. The CFPB has not yet become an effective anti-debanking force, and the phenomenon of debanking does indeed exist, particularly impacting the cryptocurrency and fintech industries. With Republicans taking control of Congress and launching related investigations, more evidence is expected to reveal the true scale and mechanisms of debanking.