OCC releases final rule to ensure fair access to financial services
On January 14, the OCC released a final rule to ensure that covered national banks, federal savings associations, and federal branches and agencies of foreign bank organizations provide fair access to financial services. The final rule is largely unchanged from the notice of proposed rulemaking (NPRM) issued last November (covered by InfoBytes here). Among other things, the final rule codifies more than a decade of OCC guidance stating that fair access to financial services, capital, and credit should be based on the risk assessment of individual customers, rather than broad-based decisions affecting whole categories or classes of customers. Building upon the principle of nondiscrimination and implementing language included in Title III of Dodd-Frank—“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 OCC stressed that the final rule establishes that “a covered bank’s decision to deny services based on an objective assessment would not violate the bank’s obligation to provide fair access.” While banks are still free to make “legitimate business decisions about what and whom to serve” and may still determine their product lines and geographic markets, they are required to make the “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.”
In finalizing the rule, the OCC considered stakeholder comments received in response to the NPRM. In response, the OCC stated that the final rule will not prevent banks from denying or limiting services in an effort to (i) prevent a person from entering or competing in a particular market; or (ii) disadvantage a person in order to benefit another person in which the bank has a financial interest. According to the OCC, this requirement would have created a regulatory burden outside of the primary objectives of the final rule. The final rule affects banks with more than $100 billion in assets and will take effect April 1.
Separately, the OCC announced the departure of Acting Comptroller of the Currency Brian P. Brooks. Brooks stepped down on January 14, and was replaced by Chief Operating Officer Blake Paulson.