OCC Eases Regulations for National Banks Regarding Controversial Customers
The Office of the Comptroller of the Currency (OCC) has announced a significant policy shift for U.S. national banks, indicating that they will no longer be required to assess how controversial customers might negatively impact their reputations. This change comes as a relief to many in the cryptocurrency sector, who have criticized this requirement as a contributing factor to the de-banking of crypto companies.
In a statement released on Thursday, the OCC clarified its stance, emphasizing that the examination process has always focused on ensuring robust risk management processes for banking activities. It is not intended to judge how certain activities may be perceived by the public. Acting Comptroller of the Currency, Rodney Hood, remarked, “The OCC’s examination process has always been rooted in ensuring appropriate risk management processes for bank activities, not casting judgment on how a particular activity may fare with public opinion.”
This decision aligns with recent remarks made by Federal Reserve Chair Jerome Powell, who indicated during a congressional hearing last month that the Fed would also remove this category of scrutiny from its internal supervision guidelines. Such moves reflect a broader commitment to fostering a more inclusive banking environment for innovative sectors, such as cryptocurrency.
Furthermore, the OCC has been actively working to simplify compliance pathways for banks involved in cryptocurrency operations. Recently, the agency rescinded previous guidance that mandated banks to seek written pre-approval before engaging in digital asset business lines. This marks a pivotal step toward encouraging banks to explore opportunities within the digital asset space without the burden of excessive regulatory hurdles.
The OCC may soon see the appointment of its permanent head, as President Donald Trump’s nominee, Jonathan Gould, is scheduled for a Senate confirmation hearing next week. The leadership of the OCC is particularly crucial, as the head of the agency has the authority to implement changes more swiftly and decisively compared to other financial regulators. This is largely due to the fact that the Comptroller operates independently, without the need for approval from a commission or board.
