Banks should provide access to services, capital, and credit based on the risk assessment of individual customers – including oil and other energy companies – rather than broad-based decisions affecting whole categories or classes of customers, according to a rule proposed Friday by the federal regulator of national banks with a public comment deadline of Jan. 4.
In a release, the Office of the Comptroller of the Currency (OCC) said its proposal would ensure fair access to banking services provided by national banks and other institutions it supervises by codifying years of guidance it has issued.
The proposal is largely aimed at blocking national banks from refusing to extend credit to oil and other energy companies out of a concern for the impact of their operations on the environment or climate change.
According to the OCC, the proposal implements language included in Title III of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank). The agency said that provision charged it with “assuring the safety and soundness of, and compliance with laws and regulations, fair access to financial services, and fair treatment of customers by, the institutions and other persons subject to its jurisdiction.”
The agency said the law expanded its responsibilities to include fair access separately from fair treatment following the last financial crisis during which the government had provided substantial public resources to support the banking system.
OCC said its proposal would apply to the largest banks in the country “that may exert significant pricing power or influence over sectors of the national economy.” The agency said it would require a covered bank to ensure it makes its products and services available to all customers in the community it serves, based on consideration of quantitative, impartial, risk-based standards established by the bank.
“Under the proposal, a covered bank’s decision to deny services based on an objective assessment of the person’s creditworthiness, ability to pay, or other quantitative, impartial, risk-based reasons would not violate the bank’s obligation to provide fair access,” the agency said.
However, OCC said, the bank may not deny a customer service to disadvantage, limit, or prevent the customer from entering or competing in a market or business segment, or to benefit another person or business activity.
Reg lookup: Fair Access to Financial Services