Debanking Developments: OCC Bulletins Clarify Expectations, But Key Questions Remain

"Debanking" occurs when depository institutions close or refuse to open customer accounts, either for permissible reasons (e.g., concerns about money laundering or other high-risk factors) or for purportedly impermissible reasons (e.g., the customer's political affiliation, religion, or involvement in legal but politically disfavored industries). Amid the growing scrutiny of this practice, one of the primary depository institution regulators, the Office of the Comptroller of the Currency (OCC), very recently issued two bulletins clarifying how it will treat debanking practices in certain circumstances. While these bulletins provide new insight into how the OCC is addressing debanking under the current administration, they also leave several important questions unanswered.