Were history a guide,
As acting head of the
The OCC isn’t alone among federal agencies jamming through rules before President-elect
Banks had little recourse to stop Brooks, a situation that left many firms threatening lawsuits and prompted furious letters to the OCC and critical commentary. The Bank Policy Institute, a trade association of large and mid-sized lenders, blasted his decision to approve the regulation that guarantees businesses “fair access” to banking services and hinted the agency will face a legal challenge.
“The rule lacks both logic and legal basis, it ignores basic facts about how banking works and it will undermine the safety and soundness of the banks,” BPI President
Brooks, a financial services lawyer and former
“Are they angry?” Brooks, 51, asked sarcastically in an interview last month. “If there was some myth that the OCC or my political team are too cozy with big banks, you can put that to rest.”
It’s a remarkable turn for the OCC, which watches over
Brooks points out that he, too, has helped Wall Street since being installed as acting comptroller of the currency in May 2020. Along with other agencies, the OCC has supported dialing back some of the restrictions born after the 2008 meltdown and tweaking capital requirements to ensure firms could keep lending during the coronavirus pandemic.
But he aggressively defends his actions that have drawn bankers’ ire, chief among them the fair access rule. The regulation is partly a response to 2018 announcements from firms, including Citigroup and
“Business lending decisions should be based on creditworthiness, rather than politics or political pressure,” said Senate Banking Committee
Brooks, who first proposed the regulation in November, argues that there’s no reason why financially sound businesses should be denied funding because of politics. He also stressed that it’s not a case of wrapping up an item on Republicans’ wish-list before Democrats take control of Congress and the White House. Underscoring that point, he said banks have been urged to shun
“We’re asking, ‘Is there any reason why it should be OK for a bank to boycott an entire legal industry segment?’” Brooks said. “And if there is, I haven’t heard it.”
The OCC spent recent weeks going through thousands of comments it received on the proposal, most of them from gun enthusiasts applauding the plan. The high public interest was likely attributable to Brooks himself. He publicized his effort through speeches, interviews and op-ed articles. Bank lobbyists on the other side of the debate watched with a mixture of horror and fascination, emailing around some of Brooks’s greatest hits.
There was his article in Game & Fish magazine -- likely a first for an OCC chief -- that argued banks are harming hunters by “suffocating” gun manufacturers’ capital needs. “We can’t rely on all bank executives to be as strong and courageous as American sportsmen,” Brooks wrote.
For their part, bankers bristle at government overseers telling them who they must lend to. They also argue that enacting such contentious policies so quickly sets a dangerous precedent, overturning long-time bank practices with little chance for interested parties to weigh in.
Brooks set a 45-day period for public comment, which the industry said was way too short -- leaving less than two weeks for the OCC to review arguments from lenders and Democratic lawmakers who oppose the rule.
Among bankers, perhaps the most popular Brooks appearance was a question-and-answer video he did at a prominent Washington attorney’s home. While there was much discussion about the OCC’s work, Brooks and the lawyer,
The other OCC policy that troubles large lenders has been his push to award bank charters to financial technology firms. Brooks encouraged the companies to apply, earning him praise as the “first fintech comptroller” from corners of the tech world. In July, Varo Bank became the first fintech company to be granted a full-service charter, followed by
The OCC is likely to be sued over the fair access rule, bank lawyers said. In addition, with Democrats soon to be in control of both the White House and Congress, there’s a good chance it could be overturned. One avenue to thwart the regulation would be the Congressional Review Act, which allows lawmakers to scrap recently enacted policies with a majority vote.
“I think it’s going to be really hard to CRA it,” Brooks said in a Thursday interview, citing Democrats’ tight majority in Congress and how lawmakers in some districts may face constituents who are avid hunters or run local businesses that are out of favor. “If you’re a Democrat sitting in an energy district, how are you going to explain how those companies aren’t going to be able to run their payroll through a bank?”
He said the rule also tells bank CEOs, “It’s not up to you to decide what’s good for people.”
Biden’s comptroller could seek to roll back or slow down Brooks’s actions. While the president-elect has yet to announce a replacement, people familiar with the matter say former Treasury Department official
“He was starting to do damage there with a number of things he did,” Brown told reporters on Tuesday. “I’m thrilled that those days are going to be behind us.”
(Updates with Brooks comment in 21st paragraph.)
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