US bank regulator faults several large lenders over 'debanking' practices
XLF•The Office of the Comptroller of the Currency found that nine large banks had policies that restricted some clients’ access to financial services based on subjective criteria. It imposed no penalties but said it may consider policy changes.
1. OCC review findings
The Office of the Comptroller of the Currency said several large banks unfairly denied services to some clients on political, religious or other grounds. Its review covered nine of the largest national banks it supervises, which collectively hold a majority of US commercial banking assets.
2. No penalties announced
The regulator criticized the practices but did not indicate that sanctions or punishments were forthcoming. The OCC said it may consider policy changes and will continue assessing whether bank policies implementing anti-money laundering and terrorist financing requirements contributed to debanking.
3. Banks dispute allegations
The OCC said at least one bank distanced itself from customer affiliations that could be viewed as partisan, and that banks generally lacked clear, measurable standards for assessing reputational risks. Large banks have denied rejecting customers on political or religious grounds and have called for clearer rules.
