President Donald Trump’s business trust has filed a lawsuit against Capital One, accusing the bank of shutting down its accounts for political reasons. The Trump Organization claims the closures caused millions of dollars worth of financial damages and were part of the “debanking” trend fronted by the Biden administration.
The lawsuit, filed in a Florida state court on Friday, alleges that Capital One arbitrarily terminated over 300 accounts linked to the Trump Organization in June 2021. The accounts reportedly held millions of dollars at the time. The decision, according to the lawsuit, severely disrupted financial operations across the organization’s properties, tenants, and employees.
“By filing this lawsuit, we seek to hold Capital One accountable for the millions of dollars in damages they caused, not just to our company, but to the many dozens of properties, hundreds of tenants, and thousands of Trump Organization employees who relied on these accounts for their livelihoods,” the company said in a statement.
Capital One denies allegations, Eric Trump says more will follow
According to the New York Times, a spokesperson for Capital One refuted the Trump Organization’s claims, stating that the bank does not have any cases of closing accounts solely based on political views.
“Capital One has not and does not close customer accounts for political reasons,” the spokesperson said in response to the court filings.
The Trump Organization’s lawsuit claims the bank’s actions fit a pattern seen during the previous administration’s tenure, where institutions have distanced themselves from Trump, his wife Melania, and their businesses since January 6, 2021, when the infamous US Capitol riots happened.
After the events of January 6, Trump’s family insists that several major banks severed ties with Trump and his business empire. Deutsche Bank and Signature Bank were among the financial institutions that supposedly “stopped working” with him in early 2021.
The Trump Organization says it was informed on March 8, 2021, that its accounts would be closed by June of that year. But, at the time of the closures, Trump’s business was also under multiple investigations.
The Manhattan district attorney’s office had subpoenaed financial records, while New York state prosecutors were questioning employees from Deutsche Bank and other institutions. The Trump Organization’s long-time accounting firm was also being investigated for fraudulent activities.
Eric Trump, who leads the Trump Organization and is a plaintiff in the case, said the lawsuit against Capital One might be “just the beginning” of a series of legal actions taken against institutions that took part in the “debanking” claims..
“More to come,” he said in a statement on March 7.
Law expert says Capital One could ‘easily’ win against Trump Organization
Adam Levitin, a Georgetown Law professor specializing in financial regulation, wrote in a blog post that Capital One should “easily” win the case if it fights it in court. Still, he noted that the bank might prefer to settle because of President Trump’s political influence.
“If Capital One doesn’t pay up, the implicit threat is that the Trump administration will move to block the Capital One-Discover merger and generally make life unpleasant for Capital One,” Levitin wrote.
“The real question here is whether Capital One is going to fight this, and, if so, how hard,” he added. “Capital One should win this one if it litigates, but it will likely come at the cost of their merger with Discover. Paying a few million to the Trump Organization in a settlement is a very low cost for greasing the wheels for the merger.”
The issue of “debanking” has become sort of a political pivot for Washington’s top office, with Trump himself publicly addressing it after returning to the White House in January.
Speaking at the World Economic Forum in Davos, Switzerland, Trump confronted Bank of America CEO Brian Moynihan about right wing-aligned businesses allegedly being denied banking services.
“I hope you start opening your bank to conservatives because many conservatives complain that the banks are not allowing them to do business within the bank, and that includes a place called Bank of America,” Trump said.
He also acknowledged that regulatory pressure under President Joe Biden’s administration may have contributed to banks distancing themselves from conservative customers.
“I don’t know if the regulators mandated that because of Biden or what, but you and JPMorgan Chase’s Jamie and everybody, I hope you’re going to open your banks to conservatives because what you’re doing is wrong,” Trump told Moynihan.
Cryptopolitan Academy: Tired of market swings? Learn how DeFi can help you build steady passive income. Register Now
