Several U.S. lawmakers are displeased by the Office of the Comptroller of the Currency and its focus on crypto and fintech during a pandemic-caused recession.
Six members of Congress faulted the banking regulator’s stance on crypto custody and stablecoin services, as well as its plans to offer a fintech charter, in a sharply-worded letter Tuesday that questioned whether acting chief Brian Brooks has his priorities straight during COVID-19’s health and economic crises.
Brooks has no business bolstering crypto banking while millions of Americans are still waiting for economic relief, wrote Reps. Rashida Tlaib (D-Mich.) and Stephen Lynch (D-Mass.) in a letter cosigned by Deb Haaland (D-N.M.), Ayanna Pressley (D-Mas.), Jesús García (D-Ill.) and Barbra Lee (D-Calif.). They blasted OCC’s “unilateral actions” as short-sighted calls that they said could put “the entire hierarchy” of dollar-denominated financial assets at risk.
“The OCC plays an important role in providing stable forms of currency. However, the decisions of your agency have the potential to adversely affect banking and financial activities well beyond your jurisdiction,” they wrote.
The letter appears to be the first substantial Congressional critique of a financial regulator that has indeed thrown its weight behind crypto. In July, OCC gave national banks the go-ahead to custody assets like bitcoin and ethereum for their clients. Then, in September, the agency allowed banks to begin offering stablecoin issuers banking services.
Those twin decisions could take crypto banking mainstream in the United States. But according to the representatives, they’re not OCC’s calls to unilaterally make. They castigated Brooks, a former Coinbase lawyer, for failing to consult Congress and other agencies on his crypto regulation first.
“We also question whether this is an appropriate priority for the OCC in the midst of this pandemic,” the representatives wrote.
Cryptocurrency should not take precedence over America’s systemic banking access issues, the representatives wrote. Around 8% of Americans use crypto. But a combined 25% of their fellow citizens are either unbanked or underbanked. Their shaky financials are deteriorating further amidst the pandemic, representatives said.
“Arguably, the immediate needs of millions of at-risk individuals who have not yet received an economic stimulus check and/or cannot deposit their funds in a bank, deserve greater attention than an effort to increase access to financial services to the “banked community” via mobile phones,” they wrote.
The representatives asked that Brooks explain OCC’s stance on stablecoin regulation and consumer protection by Dec. 10.
Wednesday’s letter isn’t the first asking Brooks to explain himself; Senator Mike Crapo (R-Idaho), chairman of the Senate Banking Committee, wrote to Brooks in September, asking him to update the committee with the OCC’s findings and detail the next steps the regulatory agency would be taking. Crapo also called for clear regulations to be drafted around cryptocurrency services in the letter.
