US banks want uniform regulations at US level

US banks have asked the Office of the Comptroller of the Currency (OCC), a federal agency in the United States responsible for supervising credit institutions, to develop federal standards on the provision of banking services, standards that would take precedence over rules imposed by state authorities, sources quoted by Reuters say, according to Agerpres.

In particular, large banks are lobbying for uniform regulations at the US level that would specify how loans can be granted, how bonds can be issued or provide banking services, while limiting the power of US states over their operations, the sources said, who wished to remain anonymous.

The call for national standards is part of a broader effort by the US banking industry to obtain more favorable conditions from the Trump administration. The requested changes would make life easier for banks, the sources say. It would also limit the power of states to disrupt bank operations with rules targeting so-called "debanking,” a term that refers to the practice of banks denying or limiting financial services to certain customers based on their religious or political beliefs. Previously, a number of US states have penalized banks and banned them from conducting operations based on customers' beliefs.

"We strongly support the preemption of federal standards and believe that federal fair access legislation would be a prudent measure to respond to account closures in all states,” said the Bank Policy Institute, a banking industry association.

Some banks argue that federal standards would streamline the rules and end a decades-old system of dual regulation, both at the federal and state levels. Federal regulators, particularly the OCC, which oversees national banks, have the authority to preempt state legislation if they believe it interferes with the operations and supervision of national banks. However, some state officials say bank supervision is necessary to develop rules specifically designed for local communities and protect consumers. The Conference of State Bank Supervisors (CSBS), a body of bank supervisors from all 50 states, has also previously argued that a dual structure is essential to safety and stability, consumer protection and competitive markets, and that a federal-only structure could change that.

Financial institutions are frequently criticized by politicians for their role in the economy and their stance on financing industries such as fossil fuels and weapons companies. States have accused banks of making policy decisions that prevent legitimate companies from accessing capital.

In response, banks argue that they should be allowed to make lending decisions based on business models and risk tolerance.