Acting OCC Head Calls for Ending Coronavirus-Related Shutdowns to Boost Economy
Brian Brooks, who became acting Comptroller of the Currency after former Comptroller Joseph Otting stepped down last week, has called for states to end the shutdown orders that were put in place to limit the spread of COVID-19. Brooks made the request in letters sent to the National League of Cities, the U.S. Conference of Mayors, and the National Association of Governors, titled “Considering the Impact of Economic Shutdown on America’s Banks.”
“Your members and the governors of our great states have the solemn responsibility to make the decisions about how and when to end your communities’ economic shutdown and let Americans get back to their lives and jobs,” Brooks wrote. “In making those decisions, the nation’s mayors and governors should be aware of a set of risks to the nation’s banking system created by continued state and local lockdown orders. Your members should consider these risks carefully and weigh them against the scope and duration of the continued lockdown orders in making your decisions, because certain aspects of these orders potentially threaten the stability and orderly functioning of the financial system the OCC is charged by law to protect.”
Though most bank trade groups have remained silent on the debate of reopening, Brooks highlighted that banks participating in commercial real estate could experience more vandalism and burglaries at vacant properties due to extended stay-at-home orders.
Additionally, Brooks claimed that the loss of normal business revenue would make it more difficult for banks to make loans. “Banks lend to customers based in part on their assessment of customers’ current and expected future income, which largely determine their ability to repay the debt,” he wrote.
The ongoing debate over reopening has pitted business advocates against public health experts, but Brooks did not acknowledge the potential health risks linked to ending shutdowns.
In a statement released yesterday, House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) blasted the letter, describing it as an “inappropriate letter pressuring city and state officials to end important public safety measures put in place to combat the spread of the novel coronavirus.”
“The COVID-19 pandemic is an ongoing national emergency, and cities and states across the nation are fighting against it, with the guidance of public health experts,” Waters said. “Mr. Brooks has no such credentials, and he too needs to listen to public health experts.”