The American Bankers Association yesterday called for the withdrawal of a controversial OCC proposal stating that banks should provide access to services, capital and credit based on their risk assessment of individual customers and not make broad-based decisions that affect whole categories or classes of customers. The rule—which was proposed by the OCC in November—would prohibit covered national banks and federal savings associations (generally, those with $100 billion or more in assets) from denying services in an effort to disadvantage or otherwise hinder the customer from competing in a market or business segment, or to benefit another person or business activity.
In its comment, ABA emphasized that the OCC does not have the statutory authority to pursue such a rulemaking, nor did it meet procedural requirements for issuing the proposal. The association pointed out that in particular, the OCC seriously underestimated the cost burden the rule would impose upon covered banks.
ABA further opposed the proposal on the grounds that the OCC should not impede the normal course of banks’ business strategies or discretion; that the proposal would undermine well-established safety and soundness practices; that it would impede bank services to underserved markets; and that the overall scope, requirements and language included in the proposal are unworkable.