The Office of the Comptroller of the Currency (OCC) acting head Brian Brooks has warned US banks that they cannot use Covid-19 as a reason for branch closures, the Financial Times (FT) reported.
Brooks has issued his warning in an interview with the financial daily.
Brooks said: “I do not believe this is the worst thing that’s ever happened in the history of the republic and so, therefore, I am not prepared to revisit the fundamentals of bank regulation.
“The pandemic is a one-time event that has affected a relatively small sliver of society compared to the number of people who depend on financial services and branches.
“People who want to be allowed to use cheques should be. I really do hope that we don’t over-index on Covid-19. It is a big deal, but it should not be cover for a whole bunch of unrelated stuff.”
According to Brooks, the current rules regarding branch closures will continue to be in place.
He also added that banks cannot expect a permanent waiver extension on some regulations to keep on lending through Covid-19.
With the accelerated use of online banking channels among customers, several banks are privately hoping that Covid-19 will help them to accelerate bank closures, reported the publication.
According to the rules, national banks that are planning to shutter branches permanently should notify OCC 90 days in advance along with a detailed rationale.
The data compiled by the Federal Deposit Insurance Corporation (FDIC) reported that over 4,500 or 6% of US bank branches have closed since 2010.