University of Wyoming Law Dean Julie Hill Discusses Debanking and Financial Regulation at UH Law
June 11, 2026—Are federal regulators using their supervisory powers to pressure banks into closing customer accounts for reasons unrelated to financial risk? The answer is unclear. That's the central theme explored by the University of Wyoming College of Law Dean Julie A. Hill. Speaking as part of UH Law Center's Colloquium/External Speaker Series, Hill presented her forthcoming paper, "Governmental Debanking."
"For this paper, I am just talking about government pressure to influence banks not to do business for a reason other than financial risk or violation of the law," she said, adding that her aim is not to prove debanking occurs, but to explain why allegations of such practices remain difficult to verify.
Hill said the core problem is limited transparency. Banks are not required to disclose why accounts are closed, she explained, and regulators treat supervisory communication as highly confidential. As a result, she noted, banks are prohibited by law from telling customers if a regulator influenced the decision.
"There's no good way for me, as an academic, or reporters, or you to know what's going on," she said. "When an account gets closed, people can guess or talk about it on social media, but they never really know what happened."
Hill outlined several aspects of the regulatory system that potentially enable debanking. One is "reputation risk," a broadly defined concept that allows examiners to weigh how a bank's customers might affect public perception and pressure banks into closing accounts without evidence of potential harm.
"It's so broad that it even includes rumors, whether they are true or not," she said.
She also cited the CAMEL system, which regulators use to evaluate banks. The management component is largely shaped by how receptive bank leadership is to examiner recommendations. A poor rating can increase costs, block mergers and restrict business, creating pressure for banks to follow recommendations even in the absence of legal requirements.
Anti-money laundering (AML) laws present a third challenge. Banks face steep penalties for failing to report suspicious activity, while over-reporting has no downside. Hill illustrated her point with the story of a guest speaker in one of her classes. The man shared the name of a deceased terrorist, and though the bank knew him personally, they were pressured to close his account.
"I just go from bank to bank," the man said, according to Hill. "Everybody opens my account, and then a few months later, they close it."
Hill argued that the broader risk is institutional. The banking system depends on public trust, and if regulators are seen as political rather than impartial, that trust erodes.
"[If] we all become so disillusioned that we think banks are just political [devices], we might be more prone to go get our money out," she said, warning that loss of confidence can endanger the whole system.
Hill proposed several reforms, including the elimination of reputation risk as a standalone supervisory tool and allowing limited delayed disclosure in some anti-money laundering cases that could provide innocent customers clarity without compromising investigations.
She also criticized restricted access to supervisory records, noting that even decades-old Federal Reserve materials remain difficult to obtain, hindering both public understanding and academic research.
The presentation sparked a lively Q&A, allowing Hill to not only reflect on her current paper but also share her earlier research with the audience.
Hill, a former faculty member at UHLC, also reconnected with former colleagues and reminisced about her time at the Law Center during her visit.
"I feel like this is, maybe even more than where I went to law school, where my career took flight," she said. "I will always be grateful that the Law Center saw potential in me and gave me the resources and mentoring I needed to fulfill my potential."
