Don’t Bank On It!
Perhaps the most drastic method taken by Prime Minister Justin Trudeau to crack down on the Canadian trucker protests, also known as the “Freedom Convoy,” was to collaborate with banks to freeze the accounts of demonstrators and their supporters, a tactic which has come to be known as “de-banking.” This mass de-banking was the final crescendo of a series of escalatory moves made to financially restrict the protestors, only made legally permissible after Trudeau invoked the Emergencies Act, initiating a state of exception and temporarily expanding the power of the federal government. Unless you are extremely wealthy, having your bank account frozen is tantamount to being cut off from participating in public life. Unsurprisingly, the financial suppression, combined with increasingly heavy police presence, formed a pincer movement; the protest collapsed in just a few days.
More recently, in the Summer of 2023, Nigel Farage, a populist British firebrand best known for leading the charge on Brexit, has been drawing attention to the fact that he and allegedly thousands of others have had their bank accounts frozen. Leaked documents from Coutts bank seem to corroborate Farage’s claim that the targeting of his accounts, and those of others of similar ideological bent, was political in nature. Alison Rose, the CEO of NatWest, the parent company of Coutts, resigned in the wake of the scandal.
This strategy of de-banking by the government is not unprecedented. Often one’s bank account is frozen when one is being charged with financial crimes. Ostensibly, when one is found guilty, money is returned to those who have been wronged; when guilt is not established, one’s bank account is reopened and the money is returned to its original owner, although, frequently, assets seized by the police or government get caught up in significant bureaucratic barriers to return to their owner(s). What makes the development of de-banking over the last few years unique is twofold: first, governments claim the right to freeze bank accounts of individuals, even if no criminal charge has been levied for reasons of national security and, second, private banks seem justified in freezing clients’ accounts because of their political views.
From the cases referenced above, some believe that banks have permission to politically vet their customers and others believe the government is permitted to restrict the finances of lawful citizens (under states of emergency). On the opposite side of the spectrum, there are individuals who reject the right of the government to interfere with one’s property and believe that banks should rigorously uphold the privacy of their customer base—historically, this is one of the reasons Swiss banks built up such a good reputation.
DISCUSSION QUESTIONS
Is there any justification for a private institution to limit/bar the ability of lawful citizens to use their services?
When is it justifiable for the government to collaborate with financial services to disrupt the activity of private individuals? When is it not?
When the government initiates a state of exception, what restrictions on its power, if any, should remain in place?
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