The Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) have finalized joint rules on August 27 that define 'unsafe or unsound practices' in bank supervision. The clarification addresses longstanding ambiguity that had allowed regulators discretion in enforcement.
OCC Head Jonathan V. Gould stated the move enables bank leaders to focus on material financial risks and supports the agency's return to risk-based supervision. He emphasized that bank supervision should prioritize substantive violations of law over concerns tied to policies, processes, and documentation standards.
The rules become effective 60 days after publication in the Federal Register. The finalization marks a significant step in addressing what some describe as 'Operation Chokepoint 2.0'—widespread reports of crypto-related firms and individuals being denied banking services.
Background on Crypto Debanking
The term 'unsafe or unsound practices' has remained undefined for years, leaving enforcement decisions to individual bank examiners. During the Biden administration, this ambiguity allowed regulators to enforce broad restrictions on crypto-related activities within the banking system. In 2022, banks received guidance warning against engaging with firms or persons dealing with crypto assets or stablecoins, resulting in debanking of crypto companies, fintechs, founders, and clients.
Supervisory guidance restricting such activities was rescinded in early 2025 after a change in administration. Regulators have since been instructed to remove barriers limiting crypto and fintech firms' participation in the U.S. banking system.
Ongoing Debate
While some view the regulatory shift favorably, critics have raised concerns. Jeremy Kress, Associate Professor of Business Law at the University of Michigan Ross, characterized the rule as exceeding the agencies' statutory authority and conflicting with established judicial precedent, arguing it undermines effective bank supervision.
