The Office of the Comptroller of the Currency (OCC) has put a hold on its recently issued fair access rule, the agency announced. The rule, which would have barred banks from denying loans to businesses on political or ideological grounds, passed two weeks ago under acting Comptroller Brian Brooks, but was widely criticized across the banking industry.
During the proposed rules comment period, the OCC noted that 31,290 of the 35,700 comments received were opposed to the rule.
The announcement comes amid what is expected to be a broad overhaul of financial regulations in the financial services industry under the Biden administration.
Under the fair access rule, banks with assets in excess of $100 billion would have been required to do business in industries that are increasingly becoming unpopular given shifting societal values – like oil producers and manufacturers of firearms.
As written, the rule said that an institution could decline banking services to a business if “the results of the bank’s objective, quantitative and individualized risk analysis demonstrate that the person should not be provided with the financial service.”
Yet banks largely viewed the rule an attack on their ability to appropriately manage their business based on the input from their stakeholders, which include customers, employees and their communities.
While many in the industry expected the rule to receive substantial scrutiny from either the new Congress or a newly appointed comptroller, the recent move to stop its publishing in the Federal Register increases the likelihood that the rule will ultimately be withdrawn by the OCC.