With the President’s days in office numbered, Deutsche Bank ditches Trump and his allies over the January 6 Capitol riot. The bank, Trump’s primary business lender, joins a growing list of banks that announced they will suspend donations from their political action committees (PACs). These major financial institutions include JPMorgan Chase, Goldman Sachs, Citigroup, and Morgan Stanley. In addition, companies such as Walmart, Marriott International, Coca-Cola, AT&T, and General also said they are suspending political donations.
According to Reuters, Deutsche Bank sought to end its relationship with Trump and his companies since November last year. The bank began feeling restless from the continuous stream of negative publicity. The President owes the bank around $340 million in three loans, payable in 2023 and 2024. After his term ends later this month, Trump will have to rely on his businesses to repay these loans or roll them with another lender. Deutsche Bank will not refinance his loans, given the bank’s anxiety to cut ties.
Trump’s relationship with Deutsche Bank began when he was a famous rich guy / real estate developer. A series of bankruptcies 30 years ago left lenders at a loss, with Deutsche one of the few willing to stick with Trump. When he shifted his focus to politics, he asked Deutsche for a loan during the 201 primaries. The bank refused, as it hadn’t foreseen his foray into politics. Deutsche then spent the next four years trying to cut its ties. One option is to send his loans to other institutions, However, it will require the President to sign off on the deal.
Other Banks Distancing Themselves As Well
Other financial institutions joined the movement. New York bank-firm Signature Bank announced they are closing two of Trump’s personal accounts, which reportedly contains $5.3 million. A signature spokesperson confirmed that they will stop transacting “with any members of Congress who voted to disregard the Electoral College.” The New York Times first reported news of the two lenders stepping away from the president. In addition, Trump maintains accounts at both JPMorgan and Capital One, both of which declined to comment.
Earlier this week, investment firm Citi said they will stop all federal contributions for the time being. Citi said it “will not support candidates who do not respect the rule of law.” She added, “We support engaging with our political leaders even when we disagree, and our PAC is an important tool for that engagement.” Meanwhile, JPMorgan announced they will similarly stop donating to politicians for the next six months. JPMorgan said that “There will be plenty of time for campaigning later.”
What Happens To Trump’s Properties?
With more firms ditching Trump and his allies, his business properties may find themselves in new territory. During the last four years, various businesses, and international agencies often checked in at Trump Hotels. Michael D'Antonio, a Trump biographer, said that once Trump steps down, “It could be that the opposite will be true now. Anyone going to DC on business would be crazy to stay at the Trump hotel unless all their business is with the Republican National Committee.”
At the same time, his properties will offer some sort of security. Deutsche Bank historically never lost on loans to Trump. If ever Trump defaults, the bank can seize his golf courses and hotels secured by the mortgages. If the total value is too low for his loan balances, Deutsche Bank can go after Trump. The President personally guaranteed the loans to his companies.
Watch the CNBC TV news video reporting on Deutsche Bank and Signature Bank cutting ties with the Trump family:
What happens to President Donald Trump once he steps down from the White House? Are more firms ditching Trump until then? Tell us what you think will happen to the President by leaving your comments below.
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