US Banking Regulator Chooses To Fight With Wall Street To End “Fair Access” Rule By Reuters

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© Reuters

By Pete Schroeder WASHINGTON (Reuters) – A major U.S. banking regulator finalized a rule on Thursday that prohibits large banks from refusing to lend to certain business sectors, after Republicans expressed frustration over what they saw as reluctance. from banks to financing arms manufacturers and energy companies. . The rule, proposed in November by the US Comptroller of the Currency, has been fiercely contested by banks who consider it unworkable and politically motivated. It applies to banks with more than $ 100 billion in assets and stipulates that they must show legitimate business reasons for not providing services to certain borrowers. The rule, promoted by Comptroller Brian Brooks, had been encouraged by some Republicans frustrated by banks’ refusal to make loans to certain types of businesses, such as gun manufacturers and oil and gas companies. Instead, Brooks said banks must evaluate each applicant on their merits, and the rule would prohibit any blanket ban. “It is inconsistent with the basic principles of prudent risk management to make decisions based solely on conclusive or categorical risk assertions without actual analysis,” Brooks said in a statement. “In addition, elected officials must determine what is legal and illegal in our country.” The OCC ended the rule on Brooks’s last day at the agency. The last minute rule has received wide condemnation, with consumer groups, Democrats and the banking industry in rare alignment in opposition. Banks say the rule takes away their ability to make business decisions for themselves and places it in the hands of the government. The banks are expected to pressure the incoming administration of President-elect Joe Biden and Democrats to find a way to repeal the rule, and have suggested they could challenge it in court.

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