A brand new Notice of Proposed Rulemaking by the United States Office of the Comptroller of the Currency (OCC) on Friday may guarantee truthful entry to banking companies to ‘legal but disfavored’ firms which have beforehand struggled to construct working relationships with banks.
According to Marco Santori, Chief Legal Officer at cryptocurrency trade Kraken, these embody “customers like the oil & gas biz, independent ATM operators and of course… crypto companies.”
“Crypto OGs know the single greatest impediment to widespread adoption has been and continues to be the lack of access to banking services,” Santori wrote. “In its early days, Bitcoin was caught up in Operation Chokepoint, and crypto more broadly is still caught up today.”
1/ 🚨 BREAKING: US Office of the Comptroller of the Currency proposes rule prohibiting giant banks from discriminating in opposition to “legal but disfavored” prospects like oil & fuel biz, impartial ATM operators and naturally…
— Marco Santori (@msantoriESQ) November 20, 2020
‘Operation Chokepoint’ is reportedly an Obama-era program that positioned strained on the relationships from these ‘legal but disfavored’ industries.
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The Association of Credit and Collection Professionals, which may additionally stand to learn from the proposed rule, reported that in Operation Chokepoint, “the Federal Deposit Insurance Corporation and U.S. Department of Justice (DOJ) reportedly applied pressure to financial institutions to cut off financial services to certain licensed, legally operating industries.”
Marco Santori: “This Proposed Rule Reads like a Basic Bill of Rights for Bank Customers.”
However, it appears that evidently the period of strained relationships between crypto and banks could quickly be drawing to an in depth.
Santori mentioned that “this proposed rule reads like a basic bill of rights for bank customers – one that you’d be shocked to hear didn’t already exist.”
The proposed rule says that so as “to provide fair access to financial services”, a financial institution will “make each financial service it offers available to all persons… served, on proportionally equal terms,” and “will not deny any person a financial service… except [as] justified by such person’s quantified and documented failure to meet quantitative, impartial risk-based standards established in advance.”
The new proposed rule will solely apply to giant banks, which Santori says “is quite sensible if you think about who the culprits are, and the relative costs of compliance.” He additionally identified that the proposed rule “doesn’t demand that banks enter lines of business for which they aren’t prepared.”
The OCC Seems to Be Taking a Favorable Stance on Crytpo
The new proposed rule is the newest in a sequence of strikes that the OCC has made to instantly or not directly help the event of the cryptocurrency trade in current months. The OCC is at the moment led by Brian Brooks, who joined the workplace earlier this 12 months. Brooks beforehand served because the Chief Legal Officer at Coinbase.
In July, the OCC printed an open letter that made it clear that banks can present cryptocurrency custody companies. CoinDesk reported that within the letter, Senior Deputy Comptroller and Senior Counsel, Jonathan Gould “wrote that any national bank can hold onto the unique cryptographic keys for a cryptocurrency wallet, clearing the way for national banks to hold digital assets for their clients.”