Just two weeks after it announced it, the Office of the Comptroller of the Currency yesterday said it was hitting the pause button on a rule intended to ensure that banks to provide fair access to services and capital — a response to Operation Choke Point — so that whomever is confirmed to be the next Comptroller can make the final decision on whether to move forward with it or not.
President Biden has nominated Michael Barr to be the next Comptroller of the Currency, the regulator in charge of national banks across the country. Barr’s nomination caused a swirl in and around Washington, D.C. Sen. Sherrod Brown [D-Ohio], the chairman of the Senate Banking Committee, which will have to confirm Barr’s nomination, was advocating for another candidate, while others, like Richard Cordray, the former director of the Consumer Financial Protection Bureau, have endorsed Barr for the OCC post.
The OCC will not publish the rule in the Federal Register, which would officially start the clock on the rule’s enactment, instead allowing “the next confirmed Comptroller of the Currency to review the final rule and the public comments the OCC received, as part of an orderly transition,” it said in a statement. The rule would have gone into effect on April 1. It still may, if the next confirmed Comptroller decides to move forward with it.
It appears as though the OCC is complying with a directive from Ron Klain, President Biden’s chief of staff, who asked agencies to pull back any regulatory actions that had not yet been published in the Federal Register. The OCC is an independent agency and was not required to comply with the rules, but may have chosen to do so anyway.
Under the rule, banks would have been required to make decisions about offering banking services, such as accounts or loans, based on the characteristics of the particular customer and not the industry in which the customer operates. During President Obama’s administration, regulators enacted Operation Choke Point, which cut off banking services to certain industries, such as firearms dealers and payday lenders, deemed to be high-risk for illegal activities. Debt collectors, unfortunately, became caught up in that operation, with many having their bank accounts, payment processing, and other financial products cut off.
