OCC Takes Action Against “Illegal De-Pasting” in Banking

On Monday, the Office of the Comptroller of the Currency (OCC) announced initiatives aimed at curbing what it calls “illegal de-pasting” within the federal banking system.

Jonathan Gould, the OCC’s top official, stated that the organization is working to eliminate the misuse of the financial system. He emphasized the need to eradicate banking practices that unfairly target or discriminate against individuals based on their political or religious affiliations.

This announcement follows an executive order from President Donald Trump, prompting the OCC to clarify its definitions related to “illegal banks” during the licensing process. It’s also assessing bank performance in alignment with the Community Reinvestment Act (CRA), taking into account practices that may be deemed unjust when evaluating compliance.

As part of its effort to investigate the potential politicization of the banking sector, the OCC has sought information from nine major regulatory bodies regarding any practices of deletion. Additionally, the Comptroller has revamped its online consumer complaint platform to enhance reporting mechanisms.

“People may be targeted and tracked based on their shopping habits or beliefs, potentially facing illegal repercussions,” Gould remarked. “The OCC will not accept the exploitation of financial records as a political device. We aim to collaborate with other government entities to identify and address such behavior.”

Trump’s Executive Order also targets the practice of “debanking,” which the Small Business Administration (SBA) is enforcing, promoting adherence among financial institutions. This directive seeks to counter practices from the Obama and Biden administrations, during which Democratic officials pressured banks to distance themselves from businesses associated with conservative views and cryptocurrency.

The SBA has mandated that lenders comply with this executive order by December 5th and submit a compliance report by January 5th.

In recent remarks, an SBA representative shared concerns about how financial institutions have weaponized the banking system against Americans resisting partisan influences, insisting that access to financial services shouldn’t be a divisive issue.