WASHINGTON—Republican lawmakers on the House Financial Services Committee have proposed five recommendations to the FDIC aimed at clarifying digital asset regulations and addressing alleged debanking. Their suggestions include removing reputational risk as a supervisory factor and requiring all supervisory guidance to undergo external, periodic review, the ABA Banking Journal reported.
In a letter to Acting FDIC Chairman Travis Hill, committee Chairman French Hill (R-AK) along with subcommittee chairmen Dan Meuser (R-PA), Andy Barr (R-KY) and Bryan Stiel (R-WI) alleged that Biden administration regulators pressured banks to deny service to digital asset firms.
“We are concerned that if we do not make the necessary changes, future administrations will continue to operate under the Choke Point playbook using the supervisory process to debank disfavored industries,” they stated in their letter.
The group’s five recommendations:
1. Written, Public Guidance: Require all banking supervisory guidance to be written and publicly disclosed (with limited redactions), ending informal “verbal-only” directives.
2. Concrete Rationale for Account Closures: Respecting Bank Secrecy Act requirements, explore ways for financial institutions to provide a clear explanation to customers when closing their account to ensure accountability.
3. Eliminate “Reputational Risk”: Prohibit use of reputational risk as a supervisory factor and clarify and reform the use (including consideration of removing as a factor) of “management” from CAMELS assessment to prevent abuse or discrimination.
4. Balancing Test for Regulations: Subject all supervisory guidance to an external, periodic review that weighs regulatory benefits against impacts on law-abiding Americans’ banking access.
5. Uniform Application: Ensure all supervisory guidance and rules apply equally to all institutions, barring preferential or punitive case-by-case treatment.
“While we understand that there is still a need for congressional action to help clarify regulations surrounding digital assets, we hope that you will look at these recommendations and implement them appropriately,” the lawmakers said.