The Office of the Comptroller of the Currency (OCC), the US’s national bank regulator, has proposed a rule that would forbid banks from providing their services to legal industries, including cryptocurrency companies.
As per the proposed rule, led by former Coinbase counsel Brian Brooks, fair access is promoted under which financial services could be denied by banks to customers only on the basis of “quantitative, risk-based standards established in advance.”
They can’t do so due to political pressures, to prevent the customer from entering or competing in a market or to benefit another person or business activity.
“If the system fails to provide fairness to all, it cannot be a source of strength for any.” @BrianBrooksOCC on the @USOCC’s proposed rule to ensure fair access to bank services, capital, and credit. https://t.co/gOn7qWdzyr pic.twitter.com/jUSGh1SvAX
— OCC (@USOCC) November 20, 2020
Published on Friday, the proposal does not explicitly mention cryptocurrency but is surely welcoming news for the industry, which has been time and again denied the services by the banks.
The proposal does mention Operation Choke Point, an initiative taken by the Justice Department under the Barack Obama presidency that reportedly aimed to shut down the fraudulent businesses and lenders.
It further reads that it has been revealed that the government agencies have pressured banks to sever their financial services access to “disfavored (but not unlawful) sectors of the economy.”
But neither OCC nor banks are well-equipped to balance these risks that are unrelated to the financial exposure, it said.
“Fair access to financial services, credit, and capital are essential to our economy,” said Acting Comptroller of the Currency Brian P. Brooks.
“This proposed rule would ensure that banks meet their responsibility to provide their services fairly since they enjoy special privilege and powers because if the system fails to provide fairness to all, it cannot be a source of strength for any.”
The proposal is open for public comments until January 4, 2021.
This week, President Donald Trump nominated the acting Comptroller Brooks as the permanent head of the OCC, a five-year stint.