OCC Issues Guidance On ‘Unlawful Debanking’ 

The guidance follows White House efforts to ensure fair access to banking.

The Office of the Comptroller of the Currency (OCC) is moving forward with guidance following President Donald Trump’s Executive Order “Guaranteeing Fair Banking For All Americans,” which affirms that banks should use an objective, risk-based analysis to provide access to financial services.

Trump signed the executive order in August to guarantee fair access to banking services for businesses, ACA International previously reported.

In 2021, the OCC finalized a rule to ensure fair access to banking services for several industries — including debt collection.

The rule was pulled by the Biden administration shortly after his inauguration in 2021.

The guidance issued this week is the next step in eliminating “politicized or unlawful debanking in the federal banking system,” according to the OCC.

“The OCC is taking steps to end the weaponization of the financial system,” said Comptroller of the Currency Jonathan V. Gould in a news release. “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.”

The OCC issued a bulletin to banks explaining how it will address politicized or unlawful debanking. The OCC will now consider a bank’s record on this issue in two key areas:

• Licensing Decisions: When evaluating a bank’s application for a license, the OCC will review its past actions and current policies to ensure it avoids improper debanking practices.
• CRA Ratings: A bank’s performance in preventing politicized debanking will also be a factor in assessing its rating under the Community Reinvestment Act.

In August, the OCC took initial steps to stop this activity in the federal banking system, consistent with the president’s executive order, such as removing references to reputation risk from its handbooks and guidance documents, ACA previously reported.

A separate OCC bulletin reminds banks of the strict rules for releasing customer financial records and properly using suspicious activity reports. The bulletin also urges institutions to align their policies with Executive Order 14331 to prevent unlawful debanking.

Gould also said last month the OCC will propose a rule removing reputational risk information from its regulations and conduct a review to assess the extent to which institutions it supervises have engaged or are engaging in politicized or unlawful debanking and take corrective actions if appropriate.

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