Debanking. It’s been all the talk of Washington lately.

President Donald Trump last month accused some big banks of engaging in politically motivated debanking. Venture capitalist and tech entrepreneur Marc Andreessen described the debanking inflicted on the crypto industry during a recent Joe Rogan podcast.

And this week, both chambers of Congress held hearings investigating the matter.

The issue merits the attention it’s getting. As a former ranking member of the Senate Banking Committee, where I served for 12 years, and a former banker myself, I can confirm that debanking is real. But it is not driven by the banks themselves.

The banking business depends on scale, and banks compete ruthlessly for all the customers they can get. Debanking is almost entirely driven by vague and excessively broad regulation or downright regulatory malfeasance.

Through thousands of pages of “Know-Your Customer” (KYC) rules promulgated under the Anti-Money Laundering Act (AML), banks are required to verify the identity of their customer and collect extensive details about their business, the sources of customer’s funds and to assess potential risks the customer may have, or pose, to the bank. Banks are required to file “Suspicious Activity Reports” (SARs) for all cash deposits (whether truly suspicious or not) above a threshold that has not been raised in 50 years.

If the bank suspects that the customer may be engaging in illicit activities, it must report the customer to the Financial Crimes Enforcement Network (FinCEN), deny services and refrain from giving the debanked customer an explanation. A bank that erringly provides services to a customer who later is determined to be a criminal can be subject to enormous fines while its senior management can be subject to civil and criminal liability. Naturally, banks err on the side of caution.

The cases of rogue regulators are even worse – these are intentional. Congressional investigators found the hard evidence that Obama administration financial regulators were pressuring the banks they regulated to debank industries that were disfavored by the administration, especially small-dollar online lenders and the firearms industry.

In what became known as Operation Chokepoint, the regulators had no legal authority from Congress and went through no public rulemaking. They simply had animus toward certain legal businesses and used the enormous power they wield over banks to try to kill those businesses, often upending people’s lives in the process.

Operation Chokepoint came to an end with the start of the first Trump administration. But no regulators lost their jobs.

So, what happened in 2021? Under the Joe Biden administration, the very same regulatory agencies launched Operation Chokepoint 2.0. This time, the target was the crypto industry.

The Biden administration overwhelmingly populated its top financial regulatory positions with people hostile to crypto. Many were happy to use their authority over banks to stifle the emerging crypto ecosystem in its infancy.

In 2021, my office started hearing from crypto entrepreneurs that their company’s bank accounts had been closed. Banks they had been using could no longer process their payrolls or even accept deposits. Many employees of even well-established crypto companies were personally debanked. Some could not get a mortgage or a checking account.

This unauthorized, unaccountable abuse of power by financial regulators to force banks to debank whole industries is outrageous, undemocratic and un-American. It is exactly what the Congressional Financial Services Committees should be investigating – and now they are.

It is time to find out exactly who was responsible for the “privatized sanctions regime” banks were forced to implement, as Andreessen calls it. The recent release of internal documents by the new leadership of the FDIC appears to contain multiple smoking guns.

Congress and the Trump administration must act to ensure that financial regulators never weaponize America’s banks against legitimate businesses again. They should significantly enhance the accountability of banking regulators and supervisors by increasing transparency and modernizing archaic laws like the Anti-Money Laundering Act.

Banks are already required to treat customers fairly and prohibited from discrimination based on race, sex or national origin. They should not discriminate on the basis of religious or political affiliation either. That said, Congress and state governments should refrain from sweeping mandates on banks that would forbid banks’ necessary, sometimes subjective, judgments regarding matters that are not always quantifiable.

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Former U.S. Sen. Pat Toomey is an adviser for the Americans For Free Markets coalition.

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