Occ Fair Access Rule
Floor Speech
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Mr. BARR. Mr. Speaker, I rise today in support of the Office of the Comptroller of the Currency's recently proposed rule to ensure fair access to banking services.
The fair access rule is a welcomed development in a time when political correctness and public relations pressure are driving the Nation's largest banks' lending decisions rather than risk metrics associated with an underlying loan.
Banks are deciding to cut off access to capital, divest their holdings, or otherwise limit financing to legally operating businesses just because those businesses are politically unpopular with outspoken critics on the far extreme left. Politicizing access to capital needs to end, and the Fair Access rule is a step in the right direction.
Mr. Speaker, the proposed rulemaking codifies longstanding principles and OCC guidance that banks should provide access to capital and credit based on the assessment of an individual borrower's risk as opposed to making broad-based decisions impacting entire industries. It is guided by fundamental principles of nondiscrimination and would ensure that banks can't pick winners and losers in the marketplace. This rule will have meaningful impacts on some of America's strongest industries and the Americans they serve.
The prohibition against redlining based on race, ethnicity, or neighborhood, regardless of an individual's qualifications and creditworthiness, is a well-established principle in Federal law. That prohibition and that principle should be extended to lawful creditworthy businesses as well.
Mr. Speaker, over the last several years, we have witnessed many cases of banks publicly committing not to do business with certain legal companies. Some banks refuse to finance new coal-fired plants; others have refused to provide credit for legally permissible drilling operations; others boycotted firearms manufacturers.
But these decisions were not based on the creditworthiness of the borrowers; they were based purely on politics.
Coal keeps the lights on. Oil and gas heat our homes and fuel our vehicles.
Should coal or oil or gas companies be subjected to a different lending standard just because of their public perception by a select few? Of course not.
These industries should not be penalized simply because of the nature of their business and private lenders' desire to placate the far left. In fact, these are companies that provide the most affordable and reliable forms of energy to the American people. They are being punished only because they are politically unpopular.
Under the rule, banks can no longer make these qualitative decisions to redline entire industries. Industries that play crucial roles in the everyday lives of Americans deserve fair access to America's financial system and should not be demonized as pawns in the politics of the day.
Banks are in the business of assessing, measuring, and managing risks. Banks should be making lending decisions based on quantifiable risks associated with a loan. If a legally operating business is a sound credit risk by objective standards, banks should not be permitted to cut off financing simply because the business isn't in the good graces of certain politicians.
Many of the rule's detractors say it is an overreach by the OCC or somehow motivated by partisan goals; but, in reality, the rule simply implements directives under Dodd-Frank to promote fair access to financial services and fair treatment of customers. It codifies in regulation statements and guidance from financial regulators under President Obama.
In 2014, then-Comptroller Tom Curry said to regulated banks:
You shouldn't feel that you can't bank a customer just because they fall into a category that, on its face, appears to carry an elevated level of risk. Higher risk categories of customers call for stronger risk management and controls, not a strategy of total avoidance.
Now, some critics of the OCC's rule have made the argument that it would compromise financial stability to force lenders to extend credit to dying industries, such as the fossil energy industry, that have no future under leftwing policies like the Green New Deal.
Has it ever occurred to these politicians that the reason why these fossil energy companies might face a challenging future is because of their own policies and because of their unrelenting desire to deny them the credit that they need to continue to operate.
Mr. Speaker, the debanking of certain legally operating industries is one in a series of examples of corporate leaders succumbing to the pressure of activists and far-left politicians. They have ceded the primacy of shareholders and are now letting politics drive their financing decisions.
Mr. Speaker, I commend Acting Comptroller Brooks on proposing this thoughtful and timely rule of nondiscrimination. This rule will ensure that all legal American companies have full access to the robust U.S. financial system and the economic freedom they deserve, and it will put an end to the misguided practice of banks playing politics with American jobs.
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