U.S. national banks have received guidance from the Office of the Comptroller of the Currency indicating that they will no longer be required to assess how contentious customers could harm their reputations—an issue that has drawn criticism from cryptocurrency firms and insiders who claim it led to their banks cutting ties.
The OCC announced the removal of this criterion from its supervision handbook in a statement released on Thursday.
“The OCC’s examination process has always focused on ensuring that banks have effective risk management practices in place for their activities, rather than passing judgment on how a specific activity may be perceived by the public,” stated Acting Comptroller of the Currency Rodney Hood.
Similarly, Federal Reserve Chair Jerome Powell had pledged during a congressional hearing last month that the Fed would also eliminate this category of review from its internal supervision guidelines.
The OCC has been proactively working to simplify compliance for banks involved in cryptocurrency operations. Recently, it retracted earlier guidance that mandated banks obtain written pre-approval from the agency for engaging in digital asset services.
The banking regulator may soon appoint a permanent leader, with President Trump’s nominee, Jonathan Gould, attending a Senate confirmation hearing next week. The head of the OCC typically has the capacity to act more swiftly and decisively compared to other financial regulators, as they operate without a commission or board needing to grant approval.