Bank Rule Requiring Lending to Oil, Gun Companies Paused by OCC
(Bloomberg) -- The Office of the Comptroller of the Currency said Thursday that it has paused publication of a final rule that would require banks to do business with companies such as oil drillers and gun manufacturers that they might otherwise choose to avoid because of perceived reputational risk.
The OCC said in a statement that the delay of the rule, which drew opposition from bankers as well as Democratic lawmakers, will give the Biden administration’s pick to lead the agency a chance to review public comment on the measure.
The controversial “fair access” rule was completed on the same day that the Trump appointed acting comptroller, Brian Brooks, stepped down after eight months on the job. The OCC’s decision to pause the final step of publishing it in the Federal Register freezes the requirement, which had been considered a prime target for reversal under the Congressional Review Act, with Democrats in control of both the House and Senate.
Banks affected by the rule, which was set to take effect April 1, would be required to make risk assessments of each potential customer without rejecting them because of the nature of their business -- as long as it’s legal.
“The rule lacks both logic and legal basis, it ignores basic facts about how banking works, and it will undermine the safety and soundness of the banks to which it applies,” Bank Policy Institute President and Chief Executive Officer Greg Baer said at the time. “Its substantive problems are outweighed only by the egregious procedural failings of the rulemaking process, and for these reasons it is unlikely to withstand scrutiny.”
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