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1 1 (February 5, 2021)

handle is hein.crs/govecbu0001 and id is 1 raw text is: Congressional_______ *.Research Service informrng the I gislative debate since 1914___________________ Office of the Comptroller of the Currency's Fair Access to Financial Services Rule February 5, 2021 On January 28, 2021, the Office of the Comptroller of the Currency (OCC) announced that it had paused publication of its FairAccess to Financial Services final rule (Fair Access Rule or the Rule), which some have considered controversial. The agency had finalized the Rule on January 14, 2021, the last day in office of Acting Comptroller of the Currency Brian Brooks, and withdrew it before publication in the Federal Register but after the Biden Administration had imposed a regulatory freeze on administrative rules. The Rule would generally prohibit national banks and federal savings associations with at least $100 billion in total assets from denying financial services to corporate entities, businesses, nonprofits, or individuals solely on a subjective basis and would set standards to impartially evaluate customer risk. At the same time that it paused publication of the Rule, OCC emphasized that OCC's long-standing supervisory guidance ... that banks should avoid termination of broad categories of customers without assessing individual customer risk remains in effect. The Rule emerged after what some have seen as a series of decisions by systemically important financial institutions (SIFIs), including Citibank, Bank of America, JP Morgan Chase ... to use their market dominance to financially discriminate against legal and compliant businesses for political reasons. Oil exploration firms and firearms dealers were denied credit by this debanking, and OCC's rulemaking referenced banks denying service to non-bank ATMs, family planning organizations, and privately operated prisons. This Legal Sidebar will first describe the Fair Access Rule and its genesis. It will then outline the Rule's progress from proposal to finalization. Finally, it will discuss how a provision of the National Bank Act may insulate OCC from the regulatory freeze. OCC's Fair Access Rule The Rule aims at preventing larger banks from cutting off services to customers -individual or corporate-based on what some characterize as political motivations rather than purely business calculations. The Rule limits application to covered banks, a term carrying a rebuttable presumption that it encompasses all national banks, federal savings associations, or federal branches or agencies of foreign banks, with assets over $100 billion. Under the Rule as proposed and in final form, a covered bank may not deny services to an individual or corporation unless it is justified by such person's Congressional Research Service https://crsreports.congress.gov LSB10571 CRS Legal Sidebar Prepared for Membersand Committeesof Congress

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