The OCC announced today that it is pausing publication of its final fair access rule in the Federal Register to “allow the next confirmed Comptroller of the Currency to review the final rule and the public comments the OCC received, as part of an orderly transition.”

The final rule is intended to codify the principle that a bank’s decision not to serve a particular customer should be based on an individual risk management decision about that individual customer, not on the fact that the customer operates in an industry subject to a broad categorical exclusion created by the bank.  The OCC stated in its announcement of the pause in publication that its “long-standing supervisory guidance stating that banks should avoid termination of broad categories of customers without assessing individual customer risk remains in effect.”  

The final rule was issued on January 14, the same day that Acting Comptroller of the Currency Brian Brooks stepped down at the OCC.  It was scheduled to take effect on April 1, 2021.  On January 20, President Biden’s Chief of Staff Ronald Klain issued a memorandum to the heads of executive departments and agencies setting forth the terms of a regulatory freeze.  The memorandum includes a requirement for a rule already sent to the Federal Register but not yet published to be immediately withdrawn from the Office of the Federal Register and approved by a department or agency head appointed by President Biden.

Although Mr. Klain’s memorandum does not appear intended to apply directly to the OCC since it is considered to be an independent agency, the OCC has nevertheless chosen to comply with the memorandum.  Blake Paulson, the OCC’s Chief Operating Officer, was named Acting Comptroller upon Mr. Brooks’ departure and President Biden has not yet named an Acting Comptroller to replace Mr. Paulson.

When the fair access rule was proposed, its critics included banking trade groups as well as consumer advocates.  Given that the proposal was characterized by Democratic lawmakers as an effort to force banks to lend to gun manufacturers and fossil energy companies, and given opposition within the banking industry, the final rule may face an uphill battle when it is reviewed by a new Comptroller of the Currency appointed by President Biden.