The Office of the Comptroller of the Currency, a bureau of the Treasury Department charged with regulating federally-insured banks, recently proposed a new rule that would ban any bank from preventing its customers from “entering or competing in a market or business segment, to benefit another person or business activity.” Some banks have become unwilling to finance oil, natural gas, or coal, any further, steering investment to alternative sources of energy, and this rule is designed to discourage such a “socially responsible investing” (SRI) bias.
During the 2016 campaign, then-candidate Donald Trump complained that the Obama administration and the deep state were waging a “war on coal”; one that he promised to reverse, bringing the federal government in line either as an ally of — or at least a neutral regarding — the future of the traditional domestic coal industry. This proposed rule indicates that the Trump administration, on the way out, sees the “war” in broader terms. It is now understood as a war against the fossil fuels in general, and they all must be defended.
The Thing to Know:
The proposal was posted as part of a standard notice-and-comment procedure. Interested parties have until and through January 4, 2021 to submit their comments to the OCC, before any final action can be taken. Whether the rule could be finalized over the following sixteen days before the Biden administration comes into office is not clear. What is certain is that the rule will receive a lot of very critical comments both from advocates of the alternative energy sources looking to SRI, and from free-market advocates who believe this is an overreach of the OCC’s authority.