By not requiring national banks to look at how bad customers might affect their reputations, the Office of the Comptroller of the Currency (OCC) has changed bank rules in a big way. As stated in a release on Thursday, this change represents a significant shift in how regulators watch over businesses. Especially for bitcoin companies that have long maintained these issues led to their debanking. By updating its supervision handbook, the OCC is only concerned with ensuring good risk management, not considering public opinion. This move aligns with more extensive efforts to make compliance easier for banks that deal with digital assets.
Alignment with Fed Policies
At the OCC’s examination process, Acting Comptroller of the Currency Rodney Hood clarified that the goal is to ensure banks have strong risk management practices, not to judge how the public might see their activities. This decision is like what Federal Reserve Chair Jerome Powell recently promised. During a meeting in Congress, Powell said that the Fed would also remove reputation risk scrutiny from its internal supervision manuals.
Integrating Crypto into Traditional Banking
Over the past few months, the OCC has been working hard to improve the regulatory situation for banks focusing on crypto. As one of the most important recent changes, the agency has taken back earlier advice that said banks had to get written permission from the agency before starting to do business with digital assets. This change in regulation aims to make it easier for banks to start using Bitcoin services.
Possible Effects of Leadership Transition
While the OCC makes these rules changes, a leadership change may also be coming up. Jonathan Gould, President Trump’s choice for Comptroller of the Currency, will have a confirmation meeting in the Senate next week. This appointment could change how the OCC regulates cryptocurrencies and monitors banks in the coming years since the chief has the power to make decisions without needing support from a commission or board.
Conclusion
This is a significant change in banking regulation because the OCC recently decided to eliminate reputation risk considerations. This is especially good for cryptocurrency companies with trouble getting banking services.
