The Office of the Comptroller of the Currency (OCC) announced Thursday it would halt the publication of a rule that would prohibit the nation's largest banks from refusing to lend to controversial industries, paving the way for the next comptroller to review and potentially reverse the rule.
The fair access rule — which prohibits banks with more than $100 billion in assets from denying services to gun manufacturers, energy firms and operators of private prisons, among other lines of business — has garnered pushback from bank trade groups and some Democratic lawmakers who say the OCC is overstepping.
- Former Acting Comptroller Brian Brooks finalized the rule Jan. 14, his last day at the regulator.
Pausing publication of the rule will allow the next confirmed comptroller to review it — along with the more than 35,000 public comments the OCC received — as part of an orderly transition, the regulator said in its statement Thursday.
"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," the agency added.
The rule was proposed in November and set to take effect in April. Consumer rights advocates criticized the decision to finalize the rule Jan. 14, questioning the OCC's ability to adequately review so much feedback before the Jan. 4 cutoff of the 45-day public comment period — and the regulator's capacity to apply any of that feedback in the 10 days between the cutoff and when the rule was issued.
The OCC has maintained the ruling codifies more than a decade of guidance stating that "banks should conduct risk assessments of individual customers, rather than make broad-based decisions affecting whole categories or classes of customers, when providing access to services, capital, and credit."
Republicans in Congress have backed the OCC's move, saying the rule prevents unpopular sectors of the economy from being blackballed by the financial services industry.
Democrats and consumer rights groups' strong opposition to the rule means it's likely a Biden administration appointee to lead the agency will choose to reverse the rule.
Former Ripple adviser and Treasury Department official Michael Barr is reportedly the favorite to head the agency, The Wall Street Journal reported last week.
Reports of Barr's potential nomination have resulted in pushback from some progressives who say the former Obama administration official, who was a liaison for then-Treasury Secretary Tim Geithner, could have been tougher on banks when drafting certain regulations in the Dodd-Frank Act, according to Politico.