The U.S. Office of the Comptroller of Currency has found that nine of the largest banks restricted financial services to various sectors, including crypto assets, between 2020 and 2023, and may refer the findings of its investigation to the Department of Justice.
A review conducted by the Office of the Comptroller of the Currency ( OCC ) has exposed the fact that some of America's largest banks are refusing to provide services to a range of politically controversial sectors, including the cryptocurrency industry.
Preliminary results released on Wednesday show that nine of the nation's largest banks applied discriminatory policies inappropriately toward customers in providing financial services based on their legitimate business activities during the three-year period from 2020 to 2023.
The investigation was launched after President Donald Trump signed an executive order in August directing a XEM of whether banks practiced cutting off banking services or discriminating against individuals based on their political or religious beliefs.
According to the OCC, banks either implement policies that restrict access to banking services or require higher-level XEM and approval before providing financial services to certain customers, although no specific details of these cases were provided.
The report found that, in addition to crypto assets, sectors facing banking restrictions include oil and gas exploration, coal mining, firearms, private prisons, tobacco and e-cigarette manufacturers, as well as the adult entertainment industry. For crypto assets, banking actions include restrictions on issuers, exchanges, or governance entities, often justified by banks based on financial crime considerations.
Reactions from experts and debate over responsibility.
Monetary Commissioner Jonathan Gould expressed frustration that the nation's largest banks argued that these harmful banking service cuts were a proper exercise of their state-granted privileges and market power. He stressed that while many of these policies were implemented publicly and even widely publicized, some banks continued to maintain they were not involved in the cuts.
The OCC XEM the nine largest banks, including JPMorgan Chase, Bank of America, Citibank, Wells Fargo, US Bank, Capital One, PNC Bank, TD Bank, and BMO Bank. The agency said it is continuing its investigation and may XEM its findings to the Department of Justice for further action.
However, the report also received criticism. Nick Anthony, a policy analyst at the Cato Institute, argued that the report had many points to make and failed to address the most well-known reasons for cutting off banking services. He pointed out that the report criticized banks for cutting ties with controversial customers but did not mention how regulators directly assess banks' reputations.
Anthony also emphasized that the report seemed to blame banks for cutting ties with cryptocurrency companies but failed to mention that the Federal Deposit Insurance Corporation had publicly told banks to stay away from these companies.
Caitlin Longing, founder and CEO of Custodia Bank, went further, stating that the worst culprits behind the banking cuts related to crypto assets under the Biden administration were the FDIC and the Federal Reserve, not the OCC. She argued that, in defending the OCC, the report only covered large banks, while suppressing crypto assets was not a supervisory priority for large banks in the same way it was for smaller and medium-sized banks.
