A group of Congressional Democrats has issued a public letter to acting Comptroller of the Currency Brian Brooks in which they criticize his office’s “unilateral actions in the digital activities space” including those focused on crypto custody and stablecoins.
The letter was penned by progressive Democrats including Reps. Rashida Tlaib, Stephen Lynch and Ayanna Pressley. Reps. Jesús “Chuy” García, Barbara Lee and Deb Haaland also signed the letter. In it, they urged the OCC to collaborate with Congress on digital issues rather than take what they described as a go-it-alone approach.
In the letter, the Representatives invoke the OCC’s recent move to allow national banking institutions to hold custody of crypto-assets on behalf of their customers — but they expressed caution about the manner in which these activities would be overseen by federal officials.
“Small and minority-owned financial institutions continue to face a deposit crisis and the Covid19 pandemic has only exacerbated this problem. For some of these banks, the ability to hold crypto-asset deposits could create beneficial outcomes,” they wrote. “Further, the movement toward digital banking activities has the potential to increase access to banking services. However, these potential gains stand to be lost, and significant consumer harm to be caused, if these new activities aren’t properly regulated. It is in the best interest of both banks and consumers for our regulators to collaborate and move forward responsibly.”
Further, the letter stated that the Representatives “question whether this is an appropriate priority for the OCC in the midst of this pandemic.”
“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,” the letter states. “Our concern regarding the OCC’s excessive focus on crypto assets and crypto-related financial services is shared by the American Bankers Association and other trade groups who have expressed similar reservations that such services move too far away from the core business of banking.”
The letter concludes with a series of questions about the OCC’s policies on stablecoins, digital assets and payments, as well as the extent to which the OCC has collaborated “with your fellow regulators on [OCC] decisions.”
Read the full letter here.
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