Corporate America's Dirty Trick
How elites captured the free speech movement to deregulate banks, airlines, and bribery.
This commentary was published in partnership with Unherd. Yesterday, the Senate Republicans finalized the repeal of the CFPB’s rules to prevent debanking — totally removing any protections for consumers. I interviewed the former CFPB director Rohit Chopra on System Update this week to discuss this issue and other matters.
The venture capitalist Marc Andreessen is one of the most forthright individuals in Silicon Valley. Yet even this billionaire maintains that his fellow elites have been muzzled. Interviewed by Joe Rogan last November, Marc Andreessen said that many of his fellow tech entrepreneurs had been debanked by the Biden administration. The Obama administration, he said, had taken such action against marijuana businesses, escorts and gun shops; Biden’s, he said, pursued tech founders, preventing them from receiving payments, making them, or buying insurance. “This is one of the reasons why we ended up supporting Trump,” he told Rogan.
Debanking is when a bank closes an account in order to censor or punish the customer for political or religious views. The banks, in these cases, are typically responding to ideological pressure or to perceived reputational risk. As you might imagine, anger over debanking rapidly merged with concerns shared by crypto companies, which have also contended with access issues to traditional banking. One CEO shared a letter in which the bank Chase said it was closing his company’s account.
The complaints about debanking were echoed and amplified by Donald Trump. His wife, Melania, claims that she herself was debanked. More broadly, the MAGA movement has ample experience of being booted off social media platforms. The matter of tech debanking, therefore, has been rolled into existing MAGA complaints. By this account, the US government has restricted freedom of expression via several coercive means.
In keeping with this view, Trump’s allies have called for a dismantling of financial watchdogs such as the Consumer Financial Protection Bureau (CPFB). “Delete CFPB”, wrote Musk, echoing Andreessen, who blamed debanking woes on the agency. Examine the policy upheavals of the past two months, though, and you will note that such measures will not have the intended effect.
Far from protecting freedom of speech, the new administration has made it easier for financial platforms to kick users off for political expression. Among the red tape it has slashed were some CFPB rules that were designed to protect, of all things, free speech. This should all work out well for Andreessen, who is one of Silicon Valley’s biggest investors in crypto — the sector that, more than almost any other, yearns for looser regulation.
Just as the casual observer loses sight of the magician’s card, many observers missed Andreessen’s sleight of hand. His remarks on the Rogan show convinced those enraged about censorship to support a niche campaign to unwind protections against crypto fraud.
In this way, Andreessen conflated two unrelated issues for his own financial benefit. In a worrying global trend, a wide array of people — Canadian truckers, Brexit supporters and Palestinian activists — have been removed from financial platforms without due process. Unrelatedly, regulators concerned with keeping crypto startups in compliance with banking rules have taken steps to crack down. Some executives involved in the crypto trade have said they have had difficulty using traditional bank accounts simply because they were flagged by the system. The truckers were debanked; the crypto executives were not.
Consider the viewpoint of regulators. On several occasions in recent years, crypto brokerages and emerging cryptocurrencies have imploded overnight and left ordinary customers with nothing. Regulators have also repeatedly accused crypto startups — including those backed by Andreessen — of a variety of alleged financial crimes. These offences have included the undermining of rules on money laundering, and the violation of sanctions on terrorist groups. It’s not entirely surprising that those entrusted with safeguarding the financial system view these schemes with extreme suspicion.
As free speech has become a battleground for everyday Americans — waged on college campuses, over political correctness in the workplace, and on social media platforms — a simultaneous legal revolution has taken shape. Corporate actors seeking to eviscerate rules and restrictions on business conduct have attempted to conflate commercial action with free expression. In other words, the business elite is piggybacking off the free speech debate for its own ends.
This piggybacking has been taking place for decades. Lawyers have poked and prodded, attempting to find new legal manoeuvres to classify business behaviour as protected speech. In this vein, Southwest and Spirit Airlines have repeatedly litigated to block a regulation that required airlines to display the full price of tickets. Another example comes via the private rating agencies that were responsible for falsely certifying the safety of risky mortgage-backed securities in the lead up to the 2008 financial crisis. In court, the agencies argued that they were simply expressing First Amendment-protected speech, and were thus exempt from fraud lawsuits.