Nine of the largest U.S. lenders made “inappropriate distinctions” among customers in politically sensitive sectors, including by applying enhanced risk controls in response to negative media reports, the Office of the Comptroller of the Currency (OCC) said.
Between 2020 and 2023, JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, U.S. Bancorp, Capital One, PNC Financial Services, Toronto-Dominion Bank and Bank of Montreal restricted access to services or subjected certain clients to extra layers of review and approval, according to an OCC report on de-banking.
Some of the banks, or lines of business within the banks, went further than regulations require by adopting policies that “may have triggered a heightened review of customers or potential customers based on negative discussion of them in newspaper articles or other media sources,” the agency concluded.
Those restrictions applied across a range of industries that have drawn public controversy or political scrutiny, including oil and gas exploration, coal mining, firearms, private prisons, payday lending, tobacco and e-cigarette manufacturers, adult entertainment, political action committees and digital-asset businesses.
The OCC criticized the decisions, which were based on internal assessments concluding that the client relationships could pose reputational risks and draw critical media coverage.
In documents reviewed by the agency, the banks expressed concerns that they could face negative attention if they were believed to have contributed to the climate crisis, domestic gun violence, or similarly controversial activity. In one instance, an institution was reticent to provide services to clients engaged in “activities that, while not illegal, are contrary to [the bank’s] values,” the OCC said.
“The OCC is committed to ending efforts, whether instigated by regulators or banks, that would weaponize finance,” said Comptroller of the Currency Jonathan Gould, in a statement.
The agency is separately reviewing “thousands of complaints” to determine whether banks have denied or restricted services to customers based on their political or religious views.
Read the OCC statement and report here