The U.S. Department of the Treasury’s Office of the Comptroller of the Currency (OCC) announced it was taking action to end debanking within the federal banking system.
The actions come after President Donald Trump’s Executive Order to guarantee fair banking, the office said. The actions will affirm that banks should provide access to financial services based on individualized, objective and risk-based analyses, the office said.
“The OCC is taking steps to end the weaponization of the financial system,” Jonathan Gould, Comptroller of the Currency said. “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.”
In a bulletin to banks, the OCC said it will consider a bank’s past record and current policies and procedures to avoid engaging in politicized or unlawful debanking when it evaluates the applicable statutory and regulatory factors for licensing activities. Debanking will also be used in determining a bank’s CRA rating, the office said.
Debanking is when a bank terminates an account or refuses to provide financial services based on the account holder’s political or religious views, lawful business activities, or perceived reputational risk to the financial institution. While banks have the right to close accounts for financial or legal risks, currently there is controversy over some claims that the practice is being used for political reasons and not objective ones.
The OCC said it has gathered information from its nine largest regulated institutions about their debanking activities. The office has also updated its online customer complaint website to address unlawful debanking. The OCC said it will continue to review its consumer complaint data and data from other government and third-party sources to refine its efforts.
“Individuals may have been targeted and surveilled based on where they shop or what they believe in and, in some cases, unlawfully debanked,” Gould stated. “The OCC will not tolerate the misuse of customer financial records as a political tool. The OCC intends to work with other government agencies to ensure this conduct is identified and addressed.”