Scott Tibbs

Bank accounts, cancel culture and government benefits

By Scott Tibbs, March 4, 2022

Should banks be allowed to penalize customers and cancel their bank accounts for their political views? There has been a lot of discussion over the last few weeks about where government should step in and stop political discrimination, especially after Mike Lindell's bank forced him to close his accounts and take his money elsewhere. In a perfect libertarian world, banks would have full freedom of association and would be able to do business or not do business with whoever they want.

But banking is not a free market and has not been a free market for generations. Banking is heavily regulated to the point that even making deposits of a certain size based on that day's revenue can bring federal criminal charges against a small business that is otherwise engaged in no criminal activity. It is almost quaint to speak of "free markets" regarding the banking industry.

So here is my policy proposal: If banks choose to discriminate against anyone for political reasons, they should lose all government protections, including membership in the Federal Deposit Insurance Corporation, or FDIC. If you benefit from federal programs, you are not allowed to discriminate against anyone for any reason. Furthermore, taking government benefits would also make discrimination illegal. The banks that got bailouts in 2008/2009 either need to pay the money back with interest or they are forbidden from discriminating against anyone for any reason.

The one exception would be criminal activity, which would require an actual criminal conviction. Even then, that would have to be regulated so that banks cannot use a littering ticket as an excuse for discrimination. The conviction would have to be for serious crimes.

Ultimately, the best solution is for corporations to resist political pressure and provide services to everyone regardless of political views. It is bad for the country to have a parallel economy where conservatives and liberals each have separate places to shop, eat and keep their money. Economic interdependency is a disincentive to extreme tribalism and political violence. The more we are separated from each other economically, the more likely it is for bitterness to grow. People who are cut off and isolated tend to become more extreme and militant, not less. Political discrimination makes our culture worse, not better.

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