Capital One Closed Trump's Bank Accounts in 2021 Over Suspected Money Laundering Characteristics

Bank accounts held by US President Donald Trump were closed by Capital One in 2021 after it flagged financial activity that had characteristics of money laundering, the bank disclosed in a court filing over the weekend.

The court filing is tied to a lawsuit filed against Capital One by one of Trump’s financial holding companies soon after he was sworn into office a second time. Trump alleges that Capital One illegally closed his accounts for political reasons, following the January 6 attacks on the US Capitol.

Capital One wants the lawsuit dismissed.

“The closures were the result of months of analysis and a careful review by Capital One’s AML team in accordance with bank policies and regulatory guidance,” the bank said in the court filing. The term “AML” is an abbreviation for anti-money-laundering.

Trump has sued Capital One, as well as JPMorgan Chase, for allegedly debanking him after he left office in 2021. Debanking happens when banks shut down customer accounts because they believe they pose financial, legal or reputational risks to the banks.

Both banks have denied they severed their relationships with the president, his sons, and other related businesses for political reasons. The lawsuit against JPMorgan Chase is seeking damages of US$5 billion. JPMorgan has said it does not close accounts for political reasons, but closes accounts “with or without cause” and also accounts that create “legal or regulatory risk”.

In July, after the original lawsuit had lain dormant for months, lawyers for the president filed an amended lawsuit that alleged the bank debanked him for political reasons. The bank says the new allegations are without merit, saying the complaint rests on “new theories based on cherry-picked quotations”.