Dive Brief:

• Capital One wants a federal judge to dismiss the Trump Organization’s de-banking lawsuit against the bank, citing a lack of evidence to support assertions made by the president’s company.
• Calling the Trump Organization’s political de-banking allegations “false,” the McLean, Virginia-based bank said while it does close bank accounts occasionally, “it does so for legally and regulatorily permissible reasons, and Plaintiffs have pled no facts suggesting otherwise,” according to the motion to dismiss filed Wednesday.
• The bank also argued the Trump Organization’s complaint, filed in Florida, doesn’t connect the dots to the various state consumer protection or consumer fraud laws its argument leans on. The case, initially filed in Miami-Dade Circuit Court, was moved to the U.S. District Court for the Southern District of Florida in April. 

Dive Insight:

The Palm Beach County, Florida-based Trump Organization and Eric Trump sued Capital One in March, accusing the bank of wrongfully closing some 300 accounts over “woke” beliefs and political and social motivations. 

In the complaint, the Trump Organization and Eric Trump argued “that they were de-banked because of President Trump’s political views,” although Capital One didn’t provide a reason for terminating the accounts. The complaint lacks a mention of the Jan. 6, 2021, attack on the U.S. Capitol, when supporters of President Donald Trump rioted to challenge the results of the 2020 presidential election, although notice of the account closures came just two months after that event. 

Capital One hit back at the Trump Organization's assertion, saying the company doesn’t have any facts to back it up.

“The only ‘fact’ pled is the unsupported statement that Plaintiffs ‘have learned’ that the closure was for political reasons, without any detail regarding that alleged discovery, along with conclusory allegations based on public reports — having no specific tie to Capital One — regarding ‘de-banking’ generally,” the bank contends. 

The contract governing the accounts allows Capital One to close an account for any reason at its discretion, and without any notice, the company said. 

Capital One’s initial communication to the Trump Organization in March 2021 gave the company three months’ notice to find new banking services, after the bank decided to close “many, but not all,” of the organization’s deposit accounts. At the company’s request, Capital One extended the closure date for some of the accounts, to give additional time, the bank said. 

The Trump Organization also notified Capital One it intended to close additional accounts the bank didn’t seek to close. By October 2021, the Trump company had moved or closed all of the accounts with the bank. 

“Almost four years to the date” after initial communication with the Trump Organization about the account closures, “and after Capital One had not heard from Plaintiffs in years,” the Trump Organization filed the lawsuit, the bank said.

“No immediate controversy exists here,” Capital One declared in the motion.  

The Trump Organization’s “generalized allegations” don’t hold up, and the complaint “fails to provide any factual or legal support for the claims asserted,” Capital One said. 

Additionally, the company’s lawsuit “asserts an assortment of claims in a Florida court under the consumer protection or consumer fraud laws of four different states — North Carolina, Nebraska, New Jersey, and Minnesota — having no plausible connection to any party,” Capital One said in the motion. “Plaintiffs have failed to plead any facts to connect the account closures to the relevant states’ laws or interests.”

Capital One also said it doesn’t appear the Trump Organization has experienced any ongoing harm or expects any future harm from the bank’s decision, or suggest it has been unable to secure alternative banking services.

Todd Baker, a senior fellow at Columbia University’s Richman Center for Business, Law and Public Policy, has said the Trump Organization’s lawsuit “should easily be dismissed, should Capital One decide to litigate,” because the complaint’s claims are weak. 

A spokesperson for the Trump Organization didn’t immediately respond to a request for comment.  

Trump himself brought the de-banking issue to the fore in January, just days after he returned to the White House. He confronted Bank of America CEO Brian Moynihan about the issue during a virtual appearance at the World Economic Forum in Davos, Switzerland, accusing Bank of America and JPMorgan Chase of de-banking conservatives.

Moynihan and JPMorgan CEO Jamie Dimon, in response, each said their financial institutions bank everybody and don’t de-bank customers for political reasons. Moynihan has pointed to “over-regulation” as the problem, and said Trump’s rebuke sparks dialogue on correcting regulation. 

Lawmakers have taken up the issue by pushing related legislation, and the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. have said they’ll stop considering reputational risk in bank supervision. 

Since the Trump Organization’s lawsuit was filed in March, Capital One has received regulatory approvals from the Federal Reserve and the OCC regarding its $35.3 billion acquisition of Discover.