Asked about the trade war with Canada on Wednesday, President Donald Trump falsely claimed that U.S. banks are not allowed to do business with its neighbor to the north.
The allegation came during a meeting with U.S. travel executives in the Oval Office, after a reporter asked Trump whether there are plans for renewed trade talks between the two countries. Experts say that although they may face restrictions, U.S. banks are not forbidden from operating in Canada. Here’s a closer look at the facts.
There are six major Schedule I banks whose combined assets eclipse those of the 28 smaller banks in the country. Nathalie Bergeron, a spokesperson for the Canadian Bankers Association, said that U.S.-based bank branches and subsidiaries operating in Canada have combined assets of approximately $124 billion in Canadian dollars — more than half of all assets held by foreign bank subsidiaries and branches. Schedule III banks are branches of foreign banks that are not incorporated in Canada and therefore face regulatory restrictions such as high deposit minimums.
“I think some confusion arises from the differences between the U.S. and Canadian regulatory systems,” said James Thompson, a professor of finance at the University of Waterloo in Canada’s Ontario province. “These banks specialize in a range of financial services, including corporate and commercial lending, treasury services, credit card products, investment banking and mortgage financing,” she said. “U.S. banks are certainly permitted to operate in Canada, but how they choose to enter the Canadian market affects what they can do. There are three categories of banks in Canada — Schedule I , Schedule II and Schedule III . Canadian-owned banks are Schedule I. Foreign entities can choose to operate as either Schedule II or Schedule III banks. Schedule II banks are foreign-owned subsidiaries incorporated in Canada that fall under essentially the same banking framework as banks owned domestically. Most U.S.-owned banks operate in Canada as Schedule III institutions. “They serve not only customers with cross-border business activities, but also Canada’s domestic retail market. Among the U.S. banks doing business in Canada are J.P. Morgan Chase Bank, Citibank, Bank of America, Capital One, and Wells Fargo.
THE FACTS: There are currently 15 U.S.-based banks operating out of Canada, either as branches or subsidiaries, according to a spokesperson for the Canadian Bankers Association. Howe Institute think tank, explained that Schedule III banks cannot accept deposits below $150,000 . There are more than 3,700 domestically owned commercial banks in the U.S., according to the Federal Reserve , compared to the 15 with a presence in Canada. 3, 2026. 8, 2026, to correct the amount of assets held by U.S.-based bank branches and subsidiaries operating in Canada. Their combined assets are an estimated US$90.1 billion, depending on the exchange rate, not US$904 million.
Both Schedule II and Schedule III banks face restrictions due to Canadian banking regulations. This means most people won’t be able to use them as their retail bank. It was updated on Sep.
There are eight Canadian banks operating in the U.S., according to the Federal Reserve’s most recent data . “Canada is a relatively small market, and incumbent Canadian banks are already very large institutions with established brands, extensive branch networks and longstanding customer relationships,” said Thompson. TRUMP: “They have their banks here, Bank of Canada, all of their big banks — big, beautiful banks. I think they have six or seven major banks here. We don’t have our banks there. You know why? They don’t allow it. Certain restrictions can make it difficult for U.S. banks to compete north of the border, experts say, but they are free to enter the market. The Bank of Canada is not one of them — it is Canada’s central bank, equivalent to the Federal Reserve in the U.S., not a commercial enterprise. Jeremy Kronick, a financial and monetary policy expert who is president and CEO of the Canadian C.D. He added that since Schedule II banks are separate legal entities from their foreign parent company, they need their own local capital and liquidity structures — an inefficient option from the bank’s perspective. Such restrictions may be the reason the majority of U.S.-owned banks choose not to do business over the border. “For a U.S. bank contemplating entry, building the infrastructure necessary to compete for Canadian retail customers would be expensive, while initially capturing only a small share of an already relatively small market. The White House did not immediately respond to a request for comment. This story was first published on Sep. Find Fact Checks here: /FactCheck . This article was generated from an automated news agency feed without modifications to text.
