Wall Street Wins Oil, Gun Loan Reprieve After White House Memo

(Bloomberg) -- Wall Street lenders, benefiting from an early gift from the Biden administration, won at least a temporary reprieve from a controversial rule that would bar them from refusing to serve businesses that they think might harm their reputations.

The Office of the Comptroller of the Currency said in a statement Thursday that its “fair access” rule, which received final approval just two weeks ago, will be paused in response to the “Regulatory Freeze Pending Review” memo that was released shortly after President Joe Biden took office on Jan. 20.

The OCC, an independent agency that is a branch of the Treasury Department, isn’t generally subject to outside direction even though it has been known to follow some White House requests. The agency said it decided on its own to pause publication of the rule in the Federal Register -- the final step to making it official.

The agency, run by acting comptroller Blake Paulson, said the halt will “allow the next confirmed Comptroller of the Currency to review the final review and the public comments the OCC received, as part of an orderly transition.”

Banks affected by the rule, which was set to take effect April 1, would be required to make risk assessments of each potential customer without rejecting them because of the nature of their business -- as long as it’s legal.

The fair-access rule was already widely considered vulnerable to being overturned by congressional Democrats, but now that it’s stopped before publication in the Federal Register, it could be withdrawn. That would be welcome news for Wall Street bankers, who reviled the regulatory effort as robbing their companies of the ability to decide whether to do business with firms -- such as oil drillers, private prisons and gun makers -- that could harm their reputations. They also criticized the OCC’s rulemaking as an overly hasty process with an unusually short comment period.

The interim comptroller responsible for the rule, Brian Brooks, stepped down Jan. 14, the day it was issued.

Biden hasn’t yet nominated a new comptroller, though former Treasury Department official Michael Barr has been said to be considered the top choice for the job.

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