On January 14, 2021, Brian Brooks, Comptroller of the Currency, issued a final rule establishing standards that a bank must follow in fulfilling its obligation to provide fair access to financial services.  The final rule is effective on April 1, 2021.

The final rule applies to banks with $100 billion or more in total assets. The OCC interprets “fair access to financial services” to recognize its broad responsibility to ensure that banks make decisions about whether to provide a person with financial services on the basis of impartial criteria that are free from prejudice or favoritism. Banks can ensure this impartiality by relying on empirical data that are evaluated consistent with their established, impartial risk-management standards

The rule was proposed on November 20, 2020. The OCC received 35,700 comments on the proposal, 28,000 of which consisted of a form letter from a single organization. Approximately 4,200 comment supported the proposal, while 31,290 comments opposed the proposal. The comment period closed on January 4, 2021. The final rule was published on January 14. That is a lot of comments to review in a few days.

We published an article title, Unusual OCC Fair Access Proposal on Fast Track on November 20, 2020. We noted that the proposal was on a fast track, that none of the other prudential regulators joined the proposal, and that the proposal raised significant safety and soundness concerns.

Former Comptroller Brian Brooks joined the OCC in April 2020. With one month of experience he became Comptroller in May 2020. In the ensuing months he pushed this proposal through the regulatory process, and published it on January 14, 2021 He also resigned his position on January 14..

The final rule will likely face an uphill battle under the Congressional Review Act or reconsideration by a new Comptroller of the Currency appointed by President-elect Biden.