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In a Legal Sidebar report, the Congressional Research Service ("CRS") explored the impact of the Biden Administration's regulatory freeze (see previous coverage) on the OCC's publication of its finalized Fair Access Rule (see previous coverage of the rule's adoption).
New OCC Rule 55.1 ("Fair Access to Financial Services") would require, among other things, that each U.S. OCC-regulated bank with at least $100 billion in total assets offer its financial services (including financial products) on "proportionally equal terms" to all persons (including legal entities) in the geographic location it serves. As previously covered, the OCC postponed publication of the Fair Access Rule in the Federal Register to allow the next confirmed Comptroller of the Currency to review the final rule "as part of an orderly transition."
The CRS stated that, although a precedent exists for the authority of an incoming Presidential Administration to halt the previous Administration's midnight rulemakings, a similar precedent may not exist for OCC regulations. The CRS cited the view of one scholar that the President's authority to "direct the actions of federal financial regulators, including the OCC, [is] circumscribed." Further, the CRS stated that (i) the language in Section 1 of the National Bank Act (12 U.S.C. 1), the statute enabling the OCC to promulgate the rule, might potentially protect it from the regulatory freeze and (ii) a statute under Title 44 (44 U.S.C. 3502) categorizes the OCC as "an independent regulatory agency."
The CRS also stated that it is possible that Congress may adopt legislation in lieu of the Fair Access Rule, explaining that such legislation could establish standards for fair access to financial services standards for all "federally chartered, regulated, or insured depository institutions."
Commentary
This rule is going nowhere. Whatever the legal theory for purposes of Administrative Law, the OCC is not going to advance it over the objections of the President.
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