One of the last things the Trump administration did before leaving town was to have the Office of the Comptroller of the Currency adopt a new rule preventing discrimination by the banking industry in lending practices or the provision of other services like credit card processing. The rule was based on the crazy idea that each customer should be evaluated based on their own financial strength and risk profile rather than discriminating against everyone in a certain, shall we say disfavored or politically unpalatable line of business.
Think firearms manufacturers, and gun stores.
Why would such a rule even need to be adopted? Well, back in the hopey changey Obama era, the administration, pushed along by the loving guidance of Attorney General Eric Holder, instituted Operation Choke Point. The Obamanauts weaponized the FDIC and OCC, using them to threaten banks, bank holding companies and other federally regulated lenders to stop doing business with the firearms industry and other companies the administration didn’t particularly like.
Obama and Holder justified Choke Point as an attempt to prevent fraud by keeping “high risk” industries out of the banking system. And if you believe that, I have some GameStop short positions I’d like to talk to you about.
Trump put an end to Choke Point when he took office and in the waning days of his presidency, the OCC adopted a new rule forbidding such political or ideological discrimination. But that was then. This is now.
Late last night, the OCC announced that publication of the new anti-discrimination rule is being “paused.” From Bloomberg (his news operation, not the anti-gun financier himself). . .
The OCC said in a statement that the delay of the rule, which drew opposition from bankers as well as Democratic lawmakers, will give the Biden administration’s pick to lead the agency a chance to review public comment on the measure.
Uh huh. Because there’s no chance at all that President Grampy McUnity’s appointee will want to see banks once again blackball payday lenders, frackers, coal companies, porn sites, or…we’re just spitballing here…gun makers and the retailers that sell them.
Of course, Operation Choke Point never really went away. Money center banks like Bank of America, Citibank, Chase, and Wells Fargo have instituted their own non-government-prompted restrictions on doing business with gun industry customers, a move that accelerated after Parkland. The banks have been joined by other companies like Intuit, Salesforce.com, Shopify and others.
So once the Biden bunch has a new head of the OCC in place, look for the anti-discrimination rule to be quietly euthanized for good. The only question then will be how long before Operation Choke Point is dusted off, resuscitated, given a new name and reinstated in full.