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Bill

LC 2860

Define and criminalize de-banking

2025 Regular Session

Montana bill proposing criminal penalties for financial institutions that close customer accounts without specified justification or procedures.

(LC) Draft Died in Process
#financialinstitutions(seealso:credittransactions)
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Bill Summary · LC 2860

Legislative bill overview

LC 2860 proposes to define and criminalize "de-banking"—the practice of financial institutions closing customer accounts or denying services. The bill would create criminal penalties for banks and financial institutions that terminate accounts without specified justification or notice procedures.

Why is this important

De-banking has become a politically contentious issue, with some arguing it targets specific groups based on ideology or lawful conduct, while others maintain banks have legitimate risk management reasons for account closures. Criminalizing de-banking could significantly restrict financial institutions' operational discretion and alter the banking industry's liability landscape.

Potential points of contention

  • Defining "de-banking": The bill's success hinges on clearly distinguishing between legitimate account closures (fraud, AML compliance, regulatory violations) and discriminatory de-banking, which is challenging to define in legislation
  • Constitutional concerns: Banks have property rights and contractual freedom; criminalizing account terminations could face constitutional challenges around due process and commercial speech
  • Unintended consequences: Overly broad language could force banks to maintain relationships with high-risk customers, potentially increasing systemic financial risk and regulatory violations
  • Federalism issues: Banking is heavily federally regulated; state-level criminalization may conflict with federal banking law and create enforcement complications

Compiled from official sources — confirm details with the bill’s official record.

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