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Biden admin blocks Trump rule that protected gun industry from bank discrimination

Wall of rifles at a gun store. (Michael Saechang/Flickr)
February 01, 2021

The Biden administration halted a Trump-era rule last week that was written to ensure “risky” industries such as the firearms industry would receive fair consumer access to banking services from large national banks, federal savings associations, and federal branches and agencies of foreign bank organizations.

The Trump-era rule was set to take effect April 1, but the Office of the Comptroller of the Currency (OCC) announced the hold on Thursday despite over a decade of OCC guidance that advised banks “should conduct risk assessments of individual customers, rather than make broad-based decisions affecting whole categories or classes of customers, when providing access to services, capital, and credit.”

The rule included language from Title III of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which made “assuring the safety and soundness of, and compliance with laws and regulations, fair access to financial services and fair treatment of customers by, the institutions and other persons subject to its jurisdiction” the OCC’s mission. The statute also notably separated fair access from fair treatment.

When the OCC proposed the rule in November, it stated, “Makers of shotguns and hunting rifles have reportedly been debanked in recent years.”

“When a large bank decides to cut off access to charities or even embassies serving dangerous parts of the world or companies conducting legal businesses in the United States that support local jobs and the national economy, they need to show their work and the legitimate business reasons for doing so,” said former Acting Comptroller of the Currency Brian P. Brooks.

“As Comptrollers and staff in previous administrations have made clear in speeches, guidance, and testimony, banks should not terminate services to entire categories of customers without conducting individual risk assessments. It is inconsistent with basic principles of prudent risk management to make decisions based solely on conclusory or categorical assertions of risk without actual analysis. Moreover, elected officials should determine what is legal and illegal in our country,” Brooks added.

The Biden administration’s move to freeze the rule sparked backlash from Republicans in Congress.

“There’s no reason for today’s action by career officials in the Office of the Comptroller of the Currency other than bending to political pressure from big banks and stalling or eliminating the rule will not stop the efforts of those of us who support it from continuing these efforts,”  said Sen. Kevin Cramer R-N.D., who is a member of the Senate Banking Committee. “The Biden Administration should use this opportunity to demonstrate leadership and not just be puppets for the large financial interests who back them.”

The National Shooting Sports Foundation also lamented the decision, calling the move the “first shot” in the Biden administration’s gun control agenda.  

“The first salvo in the gun control fight has begun and the Biden Administration has fired the first shot by improperly interfering in the affairs of the OCC which is an independent agency,” said NSSF’s Senior Vice President and Counsel Larry Keane.