Trump's claim that US banks can't operate in Canada is false

During a White House meeting with travel executives on Wednesday, President Donald Trump repeated a claim about cross-border banking that does not hold up to scrutiny. Asked about the ongoing trade dispute with Canada, he asserted that Canadian banks operate freely in the US while American banks are barred from the Canadian market.

That assertion is incorrect. According to the Canadian Bankers Association, 15 US-based banks currently operate in Canada, either as branches or as subsidiaries. These include major institutions such as J.P. Morgan Chase, Citibank, Bank of America, Capital One, and Wells Fargo. Their combined assets in Canada stand at roughly C$124.6 billion, representing more than half of all assets held by foreign bank operations in the country.

Experts point out that while US banks are permitted to enter the Canadian market, the regulatory structure creates meaningful obstacles. Canada classifies banks into three schedules. Foreign banks may operate as Schedule II institutions — subsidiaries incorporated in Canada that face rules similar to domestic banks — or as Schedule III branches, which are not locally incorporated and face tighter restrictions.

Most US banks in Canada operate under Schedule III, which prohibits them from accepting deposits below C$150,000. That effectively shuts them out of the retail banking segment for ordinary consumers. Schedule II banks, meanwhile, must maintain separate capital and liquidity structures from their parent companies, which adds cost and complexity.

Industry observers note that Canada's banking market is comparatively small and already dominated by six large domestic banks with entrenched customer relationships. For US lenders, the expense of building a retail network to compete in that environment often outweighs the potential returns, which may explain why only a handful of American banks maintain a presence there.

The claim also mischaracterizes the Bank of Canada, which Trump described as a commercial bank operating in the US. The Bank of Canada is the country's central bank — the equivalent of the US Federal Reserve — and does not operate as a commercial enterprise. Federal Reserve data shows eight Canadian banks currently operate in the United States.