The rule will be reviewed by the new comptroller at the OCC. ACA will continue to advocate for the rule under new leadership and show the impact of categorical discrimination that limits industries’ banking services. Editor’s note: This article is available for members only.
1/28/2021 13:00
The Office of the Comptroller of the Currency (OCC) has paused publication of its rule to ensure large banks provide all customers fair access to their services.
The rule codifies more than a decade of OCC guidance stating that banks should conduct a risk assessment of individual customers, rather than make broad-based decisions affecting whole categories or classes of customers, when provisioning access to services, capital and credit, according to the OCC.
It was finalized in January but is now on hold for review by the next confirmed comptroller of the OCC, according to a news release from the OCC.
“The OCC’s long-standing supervisory guidance stating that banks should avoid termination of broad categories of customers without assessing individual customer risk remains in effect,” it reports.
The OCC’s reminder that the supervisory guidance is in place and passage of the final rule in January sends a strong message that banking services should not be terminated for select industries. ACA International will continue to advocate for the rule to be finalized this year.
The rule was paused after President Joe Biden’s administration issued a memorandum on pending rules at federal agencies.
Former Treasury Department Official Michael Barr is Biden’s expected pick to lead the OCC. Any actions taken by federal agencies in response to the memorandum are required to be in compliance with the Administrative Procedures Act, ACA previously reported.
ACA was happy to see this step forward with the OCC rule early in the year and appreciated the OCC’s acknowledgement of the industry. However, it quickly became clear that the OCC’s proclamation might not align with the goals of the new administration.
While the OCC rule ultimately may have limited teeth under new leadership at the agency, it still sends a message to banks that there are many stakeholders that do not believe they should be engaging in categorical discrimination, but instead should be making individual risk-based decisions. It remains to be seen exactly how the new administration and new bank regulators will take on these issues, but we know banking relationships and banks’ political activity have become hot topics in recent months.
Recently, ACA submitted comments on the rule outlining how members continue to see their banking relationships terminated without notice or cause under the Obama-era program known as Operation Choke Point. ACA’s comments were in support of efforts by the OCC to clarify large banks’ obligation to provide fair access to financial services for legal entities consistent with the Dodd-Frank Act.
Leah Dempsey, ACA’s vice president and senior counsel of federal advocacy, will discuss the rule at a Women in Housing Finance Inc. panel Feb. 2 with Jillian C. Kirn, a shareholder at Greenberg Traurig LLP.