OCC Finalizes Rule Requiring Large Banks to Provide Fair Access to Bank Services, Capital, and Credit

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today released its finalized 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.

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.

“When a large bank decides to cut off access to charities or even embassies serving dangerous parts of the world or companies conducting legal businesses in the United States that support local jobs and the national economy, they need to show their work and the legitimate business reasons for doing so,” said Acting Comptroller of the Currency Brian P. Brooks. “As Comptrollers and staff in previous administrations have made clear in speeches, guidance, and testimony, banks should not terminate services to entire categories of customers without conducting individual risk assessments. It is inconsistent with basic principles of prudent risk management to make decisions based solely on conclusory or categorical assertions of risk without actual analysis. Moreover, elected officials should determine what is legal and illegal in our country.”

The rule implements language included in Title III of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, which charged the OCC with “assuring the safety and soundness of, and compliance with laws and regulations, fair access to financial services, and fair treatment of customers by, the institutions and other persons subject to its jurisdiction.” The statute expanded the OCC’s mission to include fair access separately from fair treatment following the last financial crisis during which the government had provided substantial public resources to support the banking system.

The rule applies to the largest banks with more than $100 billion in assets that may exert significant pricing power or influence over sectors of the national economy. Under the rule, banks still determine their product lines and geographic markets and are free to make legitimate business decisions about what and whom to serve. 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. Under the rule, a covered bank’s decision to deny services based on such objective assessment would not violate the bank’s obligation to provide fair access. However, a covered bank’s decision not to offer a specific kind of financial product or service or not to compete in a geographic market is unaffected.

In finalizing the rule, the agency considered more than 35,000 stakeholder comments and suggestions. As a result, the final rule excludes section 55.1(b)(3) of the proposed rule, which would have required that a covered bank not deny any person a financial service the bank offers when the effect of the denial is to prevent, limit, or otherwise disadvantage the person: (1) from entering or competing in a market or business segment; or (2) in such a way that benefits another person or business activity in which the covered bank has a financial interest. The agency determined that the requirement would have resulted in regulatory burden without contributing to the primary objective of the rule. Based on that analysis, the agency eliminated that requirement to focus the rule on the fairness of the covered banks’ decisionmaking processes and prudent risk management principles, as well as to facilitate the OCC’s administration of this rule. The remainder of the rule is substantially unchanged from the proposal.

The rule takes effect April 1, 2021.