WASHINGTON (Reuters) – Major U.S. banks on Wednesday pushed back on a proposal to bar them from snubbing controversial business sectors, such as oil and gas giants, in an unlikely turn of events that has pitched Wall Street against one of the Trump administration’s industry-friendly regulators.
A controversial proposal has been pushed back by the major U.S. banks on Wednesday which was going to stop them from snubbing controversial business sectors, such as oil and gas giantsin an unlikely turn of events.
The Bank Policy Institute (BPI) wrote a letter to Brian Brooks who is acting comptroller of the currency, asking for more time to assess the extraordinary proposal and requested to gain access to agency data which agency has used to evaluate its economic impact.
The letter was signed by three other major financial institutions such as Washington bank groups and JPMorgan Chase & Co., Bank of America Corp. Goldman Sachs and Morgan Stanley.
The proposal came out last week by Comptroller, suggesting a rule ensuring fair access to bank services for all types of legal businesses, based on a specific customer risk-assessment rather than broad client categories and it will apply to major banks that may exercise their pricing power over sectors of the economy.
The proposal aimed to address concerns of the both Republicans and business groups as oil and gas sector is being disadvantaged about providing extra funding as banks are under increasing investor pressure to limit lending to controversial and struggling sectors.
The general counsel at BPI John Courtsaid that the proposal is completely unworkable and the agency has no mandate to propose such a controversial rule. He further said that it is addressing a particular political problem which will force every covered bank to offer every financial product to every business and consumer in the country.
banks have a relatively short 45-day period to review the proposal if Brooks, who is seen by Democrats and consumer groups as too industry-friendly, doesn’t permit more time.
According to few industry executives Brooks is expected to be nominated for the permanent Comptroller role and he is trying to implement the rule before the new government take control in January.