A new joint rule from top US banking regulators will prohibit pressuring banks to close accounts of politically disfavored customers, a significant policy shift affecting lawful businesses from crypto to firearms.
US banking regulators on Tuesday finalized a rule preventing examiners from forcing banks to deny services to customers based on subjective “reputational risk,” a move praised by the industry as a win for clarity and fair access. The joint rule from the Federal Deposit Insurance Corp. and the Comptroller of the Currency directly addresses years of complaints that regulators were unofficially pressuring banks to de-bank lawful but politically unpopular clients.
"Supervising for reputation risk as a standalone risk adds substantial subjectivity to bank supervision and can be abused,” the agencies stated in the new joint rulemaking. They argued the practice diverts resources from more critical safety and soundness risks, which could have been a contributing factor to the bank collapses of 2023.
The new rule explicitly prohibits regulators from instructing or encouraging a bank to close customer accounts based on political views, religious beliefs, or constitutionally protected speech. This change is expected to provide more certainty for banks that have felt compelled to sever ties with industries like cryptocurrency exchanges, payday lenders, and gun retailers to avoid regulatory scrutiny.
This policy shift could encourage banks to more openly service sectors that have previously struggled to secure stable banking relationships. For the cryptocurrency industry, which has often faced challenges with account closures, this rule may pave the way for improved financial access and stability, potentially leading to greater integration with the traditional banking system. The rule is set to take effect 60 days after its publication in the Federal Register.
This article is for informational purposes only and does not constitute investment advice.
