While all the media headlines attempt to blame President Donald Trump for the political weaponization of government, they conveniently ignore a recent major success story from the Trump administration that will de-weaponize and de-politicize federal regulations. Recently, the nation’s primary regulator of national banks finally eliminated what had, over time, metastasized into an absurd and destructive intrusion of partisan politics into the country’s free enterprise system. The Office of the Comptroller of the Currency, joining with the Federal Deposit Insurance Corporation, published a final rule prohibiting federal regulators from pressuring banks to drop customers on the basis of so-called “reputation risk.”
OPINION: THE BANK SECRECY ACT IS BROKEN. IT MUST BE REFORMED IN LINE WITH ORIGINAL INTENT
No longer will regulators be able to force banks to close accounts or withhold products or services because of a customer’s “political, social, cultural, or religious views or beliefs, constitutionally protected speech, or solely on the basis of politically disfavored but lawful business activities perceived to present reputation risk.”
The new rule reverses a framework that traces back to 1995 and Eugene Ludwig, who was appointed comptroller of the currency by his longtime friend, President Bill Clinton. As comptroller of the currency, Ludwig had said that assessing reputation risk “recognizes the potential impact of the public’s opinion on a bank’s franchise value.”
