The Office of the Comptroller of the Currency (OCC) today announced actions to eliminate politicized or unlawful debanking in the federal banking system.
The actions are consistent with the President’s Executive Order (EO) 14331, “Guaranteeing Fair Banking For All Americans,” and affirm that banks should provide access to financial services based on individualized, objective, and risk-based analyses.
“The OCC is taking steps to end the weaponization of the financial system,” said Comptroller of the Currency Jonathan V. Gould. “We are working to root out bank activities that unlawfully debank or discriminate against customers on the basis of political or religious beliefs, or lawful business activities. If and when the OCC identifies such activity, it will take action to end it.”
In a bulletin to banks, the OCC clarifies how it considers politicized or unlawful debanking in certain licensing filings and in assessing banks’ records of performance under the Community Reinvestment Act (CRA). Specifically, the OCC considers a bank’s past record and current policies and procedures to avoid engaging in politicized or unlawful debanking when the agency evaluates the applicable statutory and regulatory factors for licensing activities. Debanking considerations are also assessed in determining a bank’s CRA rating.
As part of its ongoing review to assess politicized or unlawful debanking and consistent with its tailored and risk-based approach to supervision, the OCC initially requested information from its nine largest regulated institutions regarding their debanking activities. The OCC also updated its online customer complaint website to assist consumer reporting and agency identification of any unlawful debanking by its regulated institutions. The OCC is reviewing its consumer complaint data and data from other government and third-party sources to further refine OCC examination efforts.
“Individuals may have been targeted and surveilled based on where they shop or what they believe in and, in some cases, unlawfully debanked,” Gould stated. “The OCC will not tolerate the misuse of customer financial records as a political tool. The OCC intends to work with other government agencies to ensure this conduct is identified and addressed.”
In a separate bulletin, the OCC reminds financial institutions of the limited circumstances that allow for the release of customer financial records and the proper use of suspicious activity reports. The OCC also encourages its regulated institutions to ensure their policies and procedures align with EO 14331 to avoid unlawful debanking.
The OCC is reviewing its approaches to Bank Secrecy Act/anti-money laundering (BSA/AML) supervision to ensure they are not contributing to unlawful debanking and will make changes if needed. The OCC also welcomes the opportunity to work with other federal agencies to address any shortcomings in the BSA/AML regulatory framework more generally.
Today’s actions build upon the OCC’s continued efforts to depoliticize banking. Earlier this year, the OCC removed references to reputation risk from its handbooks and guidance documents and it will soon propose a rule removing these same references from its regulations. The OCC will continue to implement EO 14331 to ensure fair access.
