The OCC is taking action to address concerns about “debanking,” Comptroller of the Currency Jonathan Gould said today. Specifically, the agency is focused on examiner practices on anti-money laundering/Bank Secrecy Act compliance, where he said banks “feel put between a rock and a hard place,” and he also highlighted the agency’s removal of reputation risk from its handbooks.
Speaking at the Clearing House’s annual conference in New York City, Gould also said that the OCC is — pursuant to President Trump’s order on debanking — “looking into the very largest banks” on this issue. He said some banks have in the past “very publicly . . . made assertions about categorically discouraging or simply not banking certain sectors of our economy.”
He added that the OCC would be using its licensing process, the Community Reinvestment Act exam process, the consumer complaints it receives and third-party databases to “bring to light any debanking issues.”
Protecting preemption
Gould’s interlocutor, Sullivan and Cromwell Senior Chairman H. Rodgin Cohen, noted that “we are in a judicial quagmire now” with states attempting to apply statutes and regulations to national banks.
While Gould expressed support for federal preemption and described the OCC’s strategy for defending it—including filing amicus briefs and looking at resuming preemption determinations (which he said “the OCC has not made since Dodd-Frank was enacted in 2010”—he also called on banks to engage politically to maintain support for the principle. “The legal parameters around federal preemption of any sort . . . [are] all downstream from the political consensus necessary to support it,” he said. “If the political consensus erodes over time, preemption will narrow.”
Smoothing the path for large bank M&A
Part of Gould’s purview includes bank mergers and acquisitions. Large bank M&A has just begun to resume for the first time since 2021, noted Keefe, Bruyette and Woods President and CEO Tom Michaud, who spoke earlier in the day. “No bank [with] over $200 billion in assets was allowed to buy another bank since 2021,” he said, but this year alone, three deals by large banks have been announced—PNC’s purchase of FirstBank, Fifth Third’s deal to buy Comerica and Huntington’s acquisition of Cadence Bank.
Gould said that his goal as comptroller is to “ensure banks have as many paths as are legally permissible in a safe and sound manner to ensure their viability over time.” For many banks, this may include combinations. “From a financial stability perspective, there’s a reason where consolidation could be quite valuable,” he explained, adding that “the OCC does not have a de facto ‘no’ or view combinations as inherently worthy of skepticism. . . . The process over the past few years has gotten a little overwrought.”
