OCC to Consider Banks’ Debanking Activities in Licensing and CRA Ratings

The Office of the Comptroller of the Currency (OCC) released two bulletins to banks Monday (Sept. 8), saying in a press release that with these and other actions, it aims to “depoliticize banking” and eliminate “unlawful debanking” in the federal banking system.

One bulletin, “Licensing and Community Reinvestment Act: Consideration of Politicized or Unlawful Debanking,” said that the OCC assesses debanking considerations when evaluating licensing activities and when determining a bank’s Community Reinvestment Act (CRA) rating.

The second bulletin released Monday, “Protecting Consumer Financial Records,” reminds financial institutions of their responsibilities around customer financial records and suspicious activity reports and encourages them to ensure they avoid unlawful debanking.

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

The agency said in the release that the bulletins are consistent with President Donald Trump’s executive order, “Guaranteeing Fair Banking For All Americans.”

The OCC added that it is reviewing consumer complaint data and other data to further refine its examination efforts, and that it is reviewing its approaches to Bank Secrecy Act/anti-money laundering (BSA/AML) supervision to ensure they don’t contribute to unlawful debanking.

When announcing Trump’s executive order in August, the White House said in a fact sheet that federal banking regulators must remove reputational risk and similar concepts that enable unlawful debanking from their materials, must review financial institutions for past or current policies encouraging unlawful debanking and take remedial actions, and must review supervisory and complaint data for instances of unlawful debanking based on religion and refer those cases to the Attorney General.

“President Trump believes that no American should be denied access to financial services because of their political or religious beliefs, and that banking decisions must solely be made on the basis of individualized, objective, and risk-based analyses,” the fact sheet said.

The OCC announced in March that it will no longer examine financial institutions for reputation risk and was stripping references to “reputation risk” from its Comptroller’s Handbook and associated guidance materials.