© Reuters. FILE PHOTO: A person wearing a face mask walks down Wall Street after more cases of coronavirus are confirmed in New York City, New York
By Michelle Price
WASHINGTON (Reuters) – Major U.S. banks on Wednesday pushed back a proposal to prevent them from curtailing controversial businesses like oil and gas giants in an unlikely twist of events that put Wall Street against one of the Trump administration's industries Has. friendly regulators.
In a letter to acting currency auditor Brian Brooks, the Bank Policy Institute (BPI) asked for more time to evaluate the "unprecedented" proposal and requested data to be used by the agency to assess its economic impact.
The letter was signed by three other major Washington banking groups that collectively represent dozen of major lenders, including JPMorgan Chase & Co. (NYSE :), Bank of America Corp (NYSE :). Goldman Sachs (NYSE 🙂 and Morgan Stanley (NYSE :).
Last week, the comptroller proposed a rule that would ensure "fair access" to banking services for all types of legal transactions, based on a specific customer risk assessment rather than broad categories of customers. This is true for the largest banks, which may have pricing power over economic sectors.
The proposal aims to address concerns of Republicans and corporate groups that oil and gas majors can no longer be funded as banks are under increasing pressure from investors to curb lending to controversial sectors.
"It is a totally unworkable government mandate designed to address a specific political issue. However, its rules require every insured bank to offer every financial product to every business and consumer in the country," said John Court, general counsel at BPI. He said the agency did not appear to have legal authority to propose such a comprehensive rule.
Banks have a relatively short period of 45 days to review the proposal if Brooks, viewed by Democrats and consumer groups as too industry-friendly, doesn't give more time.
Two industry executives believed Brooks, who is expected to be nominated for the permanent comptroller role shortly, is trying to speed up the rule before Democratic-elect Joe Biden takes office in January.
"Given that this rule formalizes the guidance issued and strengthened by the OCC since at least 2014, we are surprised that banks are surprised," said a Brooks spokesman, adding that the agency looks forward to reviewing any comments .
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