A five-page report (plus cover) providing “preliminary findings” of a supervisory review of purported “debanking” activities by the nine largest banks it supervises was released Wednesday by the Office of the Comptroller of the Currency (OCC).
The OCC’s review, still underway, focuses on JPMorgan Chase Bank, Bank of America, Citibank, Wells Fargo Bank, U.S. Bank, Capital One, PNC Bank, TD Bank, and BMO Bank.
“The OCC is committed to ending efforts – whether instigated by regulators or banks – that would weaponize finance,” Comptroller of the Currency Jonathan Gould said. “Although our work continues, the OCC is today providing visibility into the debanking actions against customers and lawful businesses taken by the nation’s largest banks to ensure public awareness, and to halt these harmful and unfair practices.”
The review, with similar ones presumably underway at other federal bank and credit union regulators, is to comply with an Aug. 7 White House executive order titled “Guaranteeing Fair Banking for All Americans.” That order has already spurred federal financial regulators’ moves to eliminate reputation risk from their guidance and examination focus.
The order, which targets “unacceptable practices to restrict law-abiding individuals’ and businesses’ access to financial services on the basis of political or religious beliefs or lawful business activities,” gives federal financial institution regulators 120 days to complete reviews of such activity by institutions they supervise and take “appropriate remedial action.”
According to Wednesday’s report, between 2020 and 2023 the above-noted nine banks “made inappropriate distinctions among customers in the provision of financial services on the basis of their lawful business activities by maintaining policies restricting access to banking services or requiring escalated reviews and approvals” before providing access.
It said the banks restricted access to their services with regard to activities such as:
- oil and gas exploration in the Arctic;
- coal mining or coal-powered plants;
- manufacturing or distribution of firearms, firearm accessories, or ammunition;
- construction or operation or private prisons, including “immigrant detention centers”;
- payday and payroll lending, consumer debt collection, and repossession agencies – including those whose practices had a “disproportionate” effect on lower-income individuals;
- tobacco and e-cigarette manufacturing, distribution, or online retail;
- adult entertainment;
- political action committees and political parties; and
- digital asset activities.
The agency picks out, for its report summary, findings from the institutions’ own statements about their reputation risk concerns arising from unfavorable media coverage of certain businesses’ activities; and, among other policy matters, the institutions’ “environmental commitments.”
The OCC said its review will focus on the impact of banks’ policies over the last five years. It also said it is “still reviewing thousands of complaints to identify instances of political and religious debanking, which it will report on in due course.”
The executive order specifies that institutions that have engaged in any unlawful debanking related to religion be referred to the Attorney General. The OCC, in its preliminary report, says it intends to refer any cases of religious or “political” debanking.
OCC Releases Preliminary Findings from Its Review of Large Banks’ Debanking Activities
Executive Order 14331, “Guaranteeing Fair Banking for All Americans”
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