Biden Administration Suspends Rule Protecting Businesses from Banking Discrimination
The Biden administration has rolled back a Trump-era regulation meant to protect politically disfavored businesses, like gun manufacturers and cryptocurrency exchanges, from being categorically denied banking services.
In a statement released January 28, the Office of the Comptroller of the Currency (OCC) said that the move will allow the new comptroller to review the rule and public comments the office had received. The OCC still suggests that banks not terminate broad categories of customers without assessing individual risk.
The Fair Access Rule was established in the last weeks of the Trump administration and was set to go into effect on April 1. It stated 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.”
This regulation was meant to shield politically unpopular but otherwise legal companies from banking discrimination, following Operation Chokepoint, a program initiated by President Barack Obama’s Justice Department. While ostensibly designed to combat fraud, in practice, Reason writers have observed, it empowered the government to target unfavorable industries, such as payday lending and pornography, by “coercing private businesses in an attempt to centrally engineer the American marketplace based on its own politically biased moral judgments.”
“Officials at both the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) threatened banks with regulatory pressure if they did not bend to their will,” wrote former U.S. Attorney Frank Keating for The Hill. “Gun and ammunition dealers, payday lenders and other businesses operating legally suddenly found banks terminating their accounts with little explanation asi
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