OCC Reports on Debanking Practices Among Major U.S. Banks, Warns of Potential Unlawful Actions
The Office of the Comptroller of the Currency (OCC) released a report examining the debanking of various industries, including the cryptocurrency sector, revealing that nine of the largest U.S. national banks maintained policies restricting access to banking services from 2020 to 2023 with escalated reviews. Notable banks cited include JPMorgan Chase & Co., Bank of America, and Citigroup Inc., with references to their past public policies, particularly regarding environmental concerns.
This report responds to an August executive order by former President Donald Trump directing regulators to investigate debanking practices and to penalize those who cut off legitimate customers. The order serves as a directive rather than a law. The OCC stated its intention to hold banks accountable for unlawful debanking, including potential referrals to the attorney general, though the report does not specify exact legal statutes involved.
The findings indicate that banks have made it more difficult for controversial or environmentally sensitive businesses to gain access, often citing such activities as inconsistent with the banks’ stated values. An earlier Trump-era OCC rule aimed at assessing prospective customers based on risk factors rather than categorically denying certain industries was finalized but shelved at the beginning of the Biden administration; its current status remains unclear.
The report is based on OCC bulletins and highlights the agency’s approach to considering reputational risk as part of its supervisory oversight. However, it lacks direct legal citations. Critics argue that the report omits some causes of debanking and that regulatory emphasis on reputational risks may have contributed. Additionally, Republican lawmakers released a separate report linking regulators to debanking practices.
An OCC spokesperson did not respond to inquiries regarding specific enforcement authorities or the legal mechanisms referenced in the report.
