Why is it so hard for legal businesses to find a bank?

A legal cannabis company in Colorado pays $20,000 a year for a checking account. Not a business loan. Not a line of credit. A checking account. They consider themselves lucky — most banks won’t touch them at all.

They’re not laundering money. They’re not under investigation. They’re selling a product that’s legal in their state to customers who walk in the front door.

So why can’t they get a bank account?

They’re not the only ones asking.

The Cases Everyone’s Fighting Over

Nigel Farage, 2023. Coutts closed his account, claiming his balance fell below the threshold. Internal documents told a different story: his views were deemed “incompatible with the bank’s purpose.” Two CEOs resigned over the scandal. An independent review found the decision was lawful but unfair.

The right called it political persecution. The left called it consequences.

Crypto entrepreneurs, 2020–2024. Marc Andreessen claimed 30+ founders in his portfolio were debanked. Across the industry, firms lost access to payment processors and banking relationships — often with no explanation.

Silicon Valley called it tyranny. Regulators called it risk management.

Cannabis companies, ongoing. State-legal businesses routinely denied accounts or charged extraordinary premiums for basic services. Only two or three banks per state will work with them.

The industry calls it discrimination. Banks point to federal law.

Muslim organizations, 2014–2024. HSBC closed accounts for multiple UK Muslim organizations. Co-op Bank dropped Palestinian solidarity groups. The pattern repeated across institutions for a decade.

Communities call it Islamophobia. Banks call it enhanced due diligence.

The Pattern Nobody’s Naming

Look across these cases. What do you notice?

They span the entire political spectrum. They have nothing ideologically in common. A Brexit figurehead, crypto founders, cannabis retailers, and Muslim charities don’t share a worldview, a voter base, or an industry.

So the political explanation — censorship, bias, partisan targeting — doesn’t land. Farage and a Muslim charity aren’t just different — they’re diametrically opposed. If this were political targeting, it would need to be targeting everyone simultaneously. You can’t draw a line through these points and call it politics.

The legal explanation doesn’t hold either. These are all legal entities conducting legal business.

Something else is driving these decisions, and it’s the same thing in each case.

What Banks Actually Ask

Every bank has a compliance department, a risk committee, and a set of questions it runs through before maintaining a client relationship. The questions aren’t the ones you’d expect.

Banks don’t ask: Is this customer ethical?

They ask: Can we defend this relationship if someone tries to make it look bad?

They don’t ask: Is this ideology acceptable?

They ask: If this account becomes controversial, can we explain why we maintained it?

They don’t ask: Is this business legal?

They ask: If hosting this client creates downstream liability, can we justify the risk?

In every case, the governing question is the same: can this decision survive hostile scrutiny?

If the answer is no, access is revoked — legality, fairness, and intent notwithstanding.

The Napkin Test

Here’s a useful exercise. Imagine a bank’s risk officer has to justify each client relationship on a napkin — one sentence, to a regulator who’s already skeptical:

• Farage: “We bank a politically controversial figure with Russian associations and statements widely considered xenophobic.”
• Crypto: “We process payments for an industry under SEC investigation with unclear regulatory status.”
• Cannabis: “We serve state-legal businesses that violate federal law.”
• Muslim nonprofits: “We bank organizations that require enhanced terrorism-financing due diligence.”

None of these are one-sentence answers. They all require explanation, context, and legal nuance.

And in an environment where explanation itself carries cost, banks are choosing not to explain.

Why Neither Side Has a Leg to Stand On

The right’s error: Claiming systematic political persecution assumes coordination and intent that don’t exist. Most banks don’t care about your politics. They care whether associating with you creates measurable cost to defend.

Farage wasn’t debanked for being conservative. He was debanked for being difficult to explain in an environment where banks face instant scrutiny for client relationships. The persecution narrative mistakes a structural cause for an intentional one.

The left’s error: Celebrating debanking as “consequences” ignores that the mechanism doesn’t distinguish between actual bad actors and people whose situations are simply hard to explain.

When you cheer banks cutting off controversial figures, you’re not cheering moral judgment. You’re cheering a filter that prices complexity as risk. That filter doesn’t just hit people you disagree with. It hits legal businesses in regulatory gray zones, nonprofits in politically sensitive categories, and anyone whose business model requires more than a surface-level explanation.

What’s Actually Happening

Financial infrastructure isn’t making value judgments. It’s protecting its own money — not hedging bets with yours. It all boils down to one cost calculation: what does it cost us to stand next to you?

If defending your account requires a lengthy explanation, you’re a risk. If your business model needs context to sound legitimate, you’re a risk. If your associations can be weaponized in a viral thread, you’re a risk.

Not moral risk. Reputational risk. The cost of explaining you exceeds the revenue from serving you. You do not have value to them.

This is why moral arguments — fairness, free speech, justice — don’t move these decisions. The system doesn’t have a fairness calculator. It has a reputation model, and that model runs on one question: do I look good or bad standing next to this client? It’s high school with balance sheets.

If your business can be explained in one sentence to your biggest critic, you’re fine. End of discussion. If it can’t, you’re vulnerable.

Not because the system is corrupt. Because the system prices what it can measure. And right now, the cost of defending a complicated relationship is easier to measure than the value of maintaining one.

The Uncomfortable Implication

The incentive structure behind these decisions isn’t going away. Every trend that made them rational — instant scrutiny, viral accountability, regulatory ambiguity, reputational contagion — is accelerating.

The question for every business, every organization, every individual who depends on financial infrastructure is no longer are you operating legally?

It’s can your operations be explained to someone with every incentive to walk away — or spite you?

If the answer requires a paragraph instead of a sentence, you’re structurally vulnerable. Not because you did anything wrong. Because the infrastructure you depend on has started pricing complexity as risk.

And it doesn’t care whether that’s fair.