OCC banks cannot discriminate crypto
Cryptocurrencies,  Politics,  Regulation

Treasury Dept says banks cannot discriminate against industries like crypto

Acting Comptroller of the Currency Brian Brooks, a former Coinbase executive, issued another ruling aiding cryptocurrency companies

Another day, another pro-crypto announcement from Comptroller of the Currency Brian Brooks.

Targeting one of the cryptocurrencies biggest complaints, the Office of the Comptroller of the Currency proposed a rule on Nov. 20 that would require banks to “provide access to services, capital, and credit based on the risk assessment of individual customers, rather than broad-based decisions affecting whole categories or classes of customers.”

While it did not specifically mention cryptocurrency, Brooks was chief legal officer of cryptocurrency exchange Coinbase before moving to the Treasury Department, and has been behind a number of ruling aiding the industry.

With the exception of a small number of institutions like Silvergate Bank and Caitlin Long’s forthcoming Avanti Bank, there are few banks willing to deal with clients in the cryptocurrency industry, largely due to its reputation of being connected to the sale of illicit goods and money laundering.

“Fair access to financial services, credit, and capital are essential to our economy,” said Brooks, the acting Comptroller of the Currency, in a release. “This proposed rule would ensure that banks meet their responsibility to provide their services fairly since they enjoy special privilege and powers because if the system fails to provide fairness to all, it cannot be a source of strength for any.”

Brooks has issued a number of rulings that assisted the cryptocurrency industry, notably in July, when the OCC explicitly stated that banks can custody cryptocurrency, and again in October when it announced that “national banks and federal savings associations may hold ‘reserves’ on behalf of customers who issue stablecoins.”

Brooks’ pro-crypto rulings have had a mixed reaction in congress. On Sept. 1, Sen. Mike Crapo (R-ID), chair of the Senate Banking Committee, praised Brooks’ OCC for “taking the lead” on financial technology and digital currency issues.  

But on Nov. 1, a half dozen congressmembers led by Rep. Rashida Tlaib (D-Mich.) and Rep. Stephen Lynch (D-Mass.) sent the OCC a letter “blasting” Brooks over “the OCC’s excessive focus on crypto assets and crypto-related financial service.”

However, with Brooks still unconfirmed as the Comptroller of the Currency, which has a five-year term, questions have been raised about whether the Senate will get around to confirming him before the Trump administration leaves office. 

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.