A group of leading House Republicans are urging federal financial regulators seeking information on what they call “coordinated efforts by the agencies” to deny banking services to digital asset firms.
U.S. Reps. Patrick McHenry (R-NC), French Hill (R-AR), and Bill Huizenga (R-MI) contend that in 2021, federal prudential regulators took steps to discourage banks from providing services to digital asset firms and related entities. They cite guidance issued by the Office of the Comptroller of the Currency (OCC) on Nov. 18, 2021, that encourages banks only to provide services related to digital assets if they can assure regulators in writing that they can provide the services in a “safe and sound manner.”
They also cite a directive by the Federal Deposit Insurance Corp. (FDIC) in April 2022. It directed all FDIC-supervised institutions to provide the FDIC in writing their intent to engage in or with digital asset-related activities. The FDIC said it was necessary to guard against risk.
“Digital asset activity is not inherently risky. For example, the collapse of FTX was not caused by the riskiness of digital assets and related activities but by run-of-the-mill fraud. Similarly, the collapse of Silicon Valley Bank and Signature Bank were not caused by digital asset-related customers. The reaction by the federal prudential regulators to fraud and mismanagement should not lead to de-risking of the digital asset industry. Taken together, the actions of the Fed, FDIC, and OCC do not appear to be in reaction to recent events or the result of a sudden desire to protect financial institutions from risky behavior but instead suggest a coordinated strategy to de-bank the digital asset ecosystem in the United States,” they wrote in a letter to the heads of the OCC, FDIC, and the Federal Reserve.
They are seeking information on the actions and agenda toward the digital asset ecosystem moving forward.