OCC releases findings on large bank debanking activities 

The OCC released preliminary findings from its review of debanking activities at the nine largest national banks it supervises. 

Background: The OCC said it conducted its supervisory review in accordance with President Donald Trump’s executive order on fair banking to determine whether these institutions debanked or discriminated against any customers or potential customers on the basis of their political or religious beliefs or lawful business activities. 

Findings: The OCC said its preliminary findings show that, between 2020 and 2023, these nine banks made inappropriate distinctions among customers in the provision of financial services. Comptroller Jonathan Gould said, going forward, the OCC will hold banks accountable for these actions and ensure unlawful debanking does not continue. 

Past Actions: The OCC in September issued two bulletins clarifying its policies on politicized or unlawful debanking in accordance with the executive order on ensuring fair banking for all Americans. 

About the Executive Order: Trump’s August “Guaranteeing Free and Fair Banking for All Americans” executive order directs federal banking regulators to remove the use of reputation risk in their materials and identify financial institutions that have had policies or practices that facilitate politicized or unlawful debanking and to take appropriate remedial action. 

SBA Actions: The Small Business Administration in August ordered the banks in its network to halt the practice of debanking certain individuals and businesses and to submit reports to the agency on their compliance with the executive order. As requested by ICBA, the SBA in October released a streamlined form to help community banks comply with the executive order. 

More Agency Initiatives: The FDIC and OCC in October proposed rules to prohibit the use of reputation risk by regulators and to revise the supervisory framework for “unsafe or unsound” banking practices. 

ICBA View: In a national news release following the release of the executive order, ICBA distinguished community banks from larger institutions and said the community bank business model is rooted in local relationships and trust, not transaction volume or political motivations. ICBA strongly opposed “Operation Choke Point” initiatives under previous administrations, which aimed to discourage financial institutions from providing payments and deposit services to legal but politically disfavored industries.