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Published: January 2021

New banking rule aims to prop up fossil fuel industry

Consumer Action joined in opposing the Office of the Comptroller of the Currency's (OCC) deceptively titled Fair Access to Financial Services proposed rule. The rule would pressure and, in some cases, require banks to lend to fossil fuel companies, without regard to strategic or reputational risk. The proposed rule flatly contradicts the OCC’s mission by threatening the safety and soundness of banks seeking to mitigate climate-related risks. It twists the language of racial justice and redlining to justify pressuring banks to lend to the increasingly risky fossil fuel industry. Forcing banks to take on dangerous investments will stress the financial system and prop up a dying industry that continues to damage the environment.

With the climate crisis intensifying, some big banks have recently ruled out making certain loans in the hope of easing both their reputational and credit risks. In an attempt to prop up the fossil fuel industry, the Comptroller of the Currency (OCC) issued a new rule requiring large banks to make a documented and individualized assessment of pending customers before denying loan applications. The rule also fails to consider the increasing credit and operational risks of the fossil fuel industry. Banks cutting ties with the industry are responding prudently to developments such as the rapid shift toward a low-carbon economy and the fossil fuel industry’s disproportionate reliance on CARES Act bailouts. The rule exceeds the OCC’s legal authority and defines fair access to financial services in a way that could compel lending to risky, climate-harming industries.

Lead Organization

Public Citizen

Other Organizations

Public Citizen | Alaska Wilderness League | Americans for Financial Reform Education Fund | Baltimore, MD Phil Berrigan Memorial Chapter Veterans For Peace | BankTrack | Beneficial State Foundation | Better Markets | Call to Action Colorado | CatholicNetwork.US | Center for International Environmental Law | Climate Hawks Vote | ClimateYogi.org | Colorado Businesses for a Livable Climate | Colorado Democratic Party Energy & Environment Initiative | Consumer Action | Friends of Alaska National Wildlife Refuges | Institute for Agriculture and Trade Policy | Interfaith Center on Corporate Responsibility | Jim Schulman, Architect | National Community Reinvestment Coalition | Rainforest Action NetworkRapidShift.Network | Revolving Door Project | Sierra Club | Texas Campaign for the Environment | The Wilderness Society | U.S. PIRG | Union of Concerned Scientists | Venner Consulting

More Information

Click here to read the letter in full.

For more information, please visit Public Citizen.

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