OCC Debanking Report on Nine Big Banks: AML Compliance Angle

The news

The Office of the Comptroller of the Currency on October 14 released a report of findings from its supervisory review of debanking activities at the nine largest national banks it supervises.

The banks covered are JPMorgan Chase Bank, Bank of America, Citibank, Wells Fargo Bank, U.S. Bank, Capital One, PNC Bank, TD Bank and BMO Bank. The report is the product of the agency’s supervisory work, meaning it draws on the OCC’s examination authority rather than on a public rulemaking process.

Key takeaways

• The OCC published findings from a supervisory review of debanking at its nine largest national banks.
• The group spans the biggest money-center banks, large regionals and the U.S. arms of two Canadian lenders.
• The review is supervisory, so its practical effect will show up in how examiners treat account-access decisions going forward.
• Banks, customers and compliance teams will be watching for any follow-up guidance or examination expectations.

Our analysis

Debanking generally refers to a bank restricting, declining or ending a customer’s access to accounts or services. It is a politically charged subject, and it sits where several regulatory duties meet: fair access to financial services, safety-and-soundness risk management, and anti-money-laundering obligations.

That intersection is why the review matters for AML compliance teams. Banks must monitor for suspicious activity and manage customer risk, and decisions to exit or decline relationships often rest on those judgments. A supervisory report that examines how the largest institutions make and document such decisions can shape how compliance officers think about their files, their escalation paths and the reasons they record.

The choice of institutions also matters. Naming all nine banks in one review puts a common lens on firms with very different business mixes, from large retail and commercial franchises to a card-focused lender. Any shared expectations that emerge are likely to reach well beyond these nine, since smaller national banks tend to track what the OCC says about the largest ones.

For consumers and small businesses, the stakes are practical. Losing a deposit account can cut off payments, payroll and access to credit products tied to that relationship. How examiners evaluate these decisions could affect how readily customers can challenge or learn the reasons for an account closure, though the details of any such effect will depend on what the OCC does next.

Room for disagreement

Reasonable observers will differ on what a supervisory review can accomplish. Some will see it as a necessary check on opaque account-closure practices. Others will argue that banks need wide latitude to exit relationships they judge risky, and that second-guessing those calls could pull examiners into business decisions and sit uneasily with AML expectations from other agencies.

There is also a fair debate about scope. A review of nine banks gives a view of the largest players, but it is not a census of the industry, and findings at big institutions may not describe community or regional banks that operate differently.

What to watch

• Follow-up from the OCC. Look for any supervisory guidance, examination procedures or corrective expectations that build on the findings.
• Bank responses. The nine named institutions may update account-closure policies or disclosures.
• Coordination with other regulators. AML and consumer-protection expectations come from multiple agencies, and alignment, or friction, between them will shape what compliance teams actually do.
• Congressional and public reaction. Debanking has drawn attention beyond the regulatory community, so hearings or legislative proposals could follow.