Aug 4 (Reuters) - The White House is drafting an

executive order that would impose penalties on banks for

dropping customers for political reasons, the Wall Street

Journal reported on Monday.

Citing a draft of the order, the Journal said regulators

would be instructed to investigate whether any financial

institutions breach the Equal Credit Opportunity Act, antitrust

laws or consumer financial protection laws.

The order, which could be signed as early as this week,

would authorize monetary penalties, consent decrees or other

disciplinary measures against violators, the Journal reported.

It also calls on regulators to strike policies they have

that might have contributed to banks dropping certain customers

and requires the Small Business Administration to review the

practices of banks that guarantee the agency's loans, according

to the report.

U.S. President Donald Trump in January said the CEOs of

JPMorgan Chase ( JPM ) and Bank of America ( BAC ) did not

provide banking services to conservatives. The two banks denied

making banking decisions based on politics.

The criticism of Wall Street banks followed accusations from

congressional Republicans and Republican-led states, who claimed

the institutions were engaging in "woke capitalism" and unfairly

cutting ties with gun manufacturers, fossil fuel companies, and

other businesses perceived to be aligned with the political

right.

The Trump administration is pursuing a broad reform agenda

aimed at modifying rules governing financial institutions,

including capital requirements, arguing that such action will

boost economic growth and unleash innovation.

The White House did not immediately respond to a Reuters

request for comment.