I can understand banning bad actors that successfully or unsuccessfully perform fraud and other such direct acts against payment processors or merchants.

For pretty much anything else, nope only courts in jurisdiction should be able to act... If even then.

I think the root of much of this are money laundering rules. The feds want to be able to punish bad guys without actually proving the crime they are suspected of. There are now a large set of rules which the government isn’t efficient enough to enforce, so it has actually become the banking industry’s legal responsibility. Once such things are normalized, they get stretched.