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Bank Watchdog Cautions Local Officials Over Virus Restrictions

June 1, 2020, 7:10 PM

The acting head of the U.S. agency that oversees national banks is warning local governments that restrictions aimed at combating the spread of Covid-19 may be keeping community lenders from doing their part to spur economic recovery.

Brian Brooks, who took the helm at the Office of the Comptroller of the Currency late last week, made the comments citing potential harm to the federal banking system in a Monday letter to groups representing governors and mayors.

“Your members should consider these risks carefully and weigh them against the scope and duration of continued lockdown orders in making your decisions,” Brooks wrote. “Certain aspects of these orders potentially threaten the stability and orderly functioning of the financial system the OCC is charged by law to protect.”

He said “more and more cities and states have shown that it is possible to successfully narrow or even end their lockdowns.” He also cautioned against requiring bank customers to wear masks to limit the spread of the coronavirus, saying that could “create the very real risk of increases in bank robberies.”

Brooks has moved quickly since taking the helm at OCC from Joseph Otting. The former Fannie Mae executive, who more recently served as the top lawyer for Coinbase Inc., approved a final rule governing the portability of loan rates during his first day on the job Friday and also declared that lenders shouldn’t shut out industries that are deemed unpopular.

While some acting agency heads may hesitate to rock the boat, Brooks was handpicked for the position by Treasury Secretary Steven Mnuchin. Like his predecessor, he was an executive and board member at OneWest Bank, which Mnuchin owned along with a group of investors before selling to CIT Group Inc.

To contact the reporter on this story:
Jesse Hamilton in Washington at jhamilton33@bloomberg.net

To contact the editors responsible for this story:
Jesse Westbrook at jwestbrook1@bloomberg.net

Gregory Mott

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