U.S. Rep. Andy Barr (R-KY) last week voiced support for a newly issued rule by the Office of the Comptroller of the Currency (OCC) requiring banks to provide fair access to bank services, capital and credit to all of their customers.
“I commend the OCC for issuing the Fair Access to Banking rule,” Rep. Barr said. “The Fair Access Rule is a welcome development in a time when political correctness and public relations pressure are driving the nation’s largest banks’ lending decisions, rather than the risk metrics associated with an underlying loan.”
The OCC on Jan. 14 released its final rule to ensure fair access to banking services provided by large national banks, federal savings associations, and federal branches and agencies of foreign bank organizations having more than $100 billion in assets “that may exert significant pricing power or influence over sectors of the national economy,” according to the OCC.
The rule codifies more than a decade of OCC guidance stating that banks should conduct risk assessment of individual customers, rather than make broad-based decisions affecting whole categories or classes of customers, when provisioning access to services, capital and credit, the OCC said.
“Banks are deciding to cut off access to capital, divest their holdings, or otherwise limit financing to legally operating businesses because those businesses are politically unpopular with outspoken critics on the left,” said Rep. Barr. “The rule will ensure that banks’ decisions to finance legally operating businesses, such as fossil energy companies, are based on objective risk metrics and not political posturing.”
Under the rule, which takes effect on April 1, banks still determine their product lines and geographic markets and are free to make legitimate business decisions about what and whom to serve, the OCC says. However, the rule requires covered banks to make those products and services they choose to offer available to all customers in the communities they serve, based on consideration of quantitative, impartial, risk-based standards established by the bank.
“Politicizing access to capital is unacceptable and needs to end,” Rep. Barr added. “The Fair Access Rule is a step in the right direction.”