Whistleblower Reports Say FDIC Headquarters Improperly Stifling Crypto Business for Banks
Toomey Seeks More Information from FDIC
Washington,
D.C.
– U.S. Senate Banking Committee Member Pat Toomey (R-Pa.) is asking
for more information after learning that the Federal Deposit
Insurance Corporation (FDIC) may be improperly deterring banks from doing
business with lawful crypto companies.
According to whistleblower reports, personnel in the FDIC’s Washington, D.C. headquarters are urging its regional offices to request that banks refrain from expanding relationships with crypto companies, without providing any legal basis for taking such action. The FDIC’s headquarters reportedly distributed draft letters to regional offices to send to banks.
In
a letter
to FDIC Director and Acting Chairman Martin Gruenberg, Ranking Member Toomey
expressed concerns about the FDIC’s alleged interference in these lawful
business activities.
“My office has received information from
affected parties and protected whistleblower communications alleging the FDIC
is taking such actions, even though the FDIC has not determined that these
companies are providing services that are unlawful or impermissible, or that it
is unlawful or impermissible for FDIC-supervised banks to do business with
these companies. Given
the FDIC’s involvement under your leadership in the Obama administration’s
notorious Operation Choke Point, which sought to coerce banks into denying
services to legal yet politically disfavored businesses, it is important to
better understand the actions the FDIC is now taking and the legal basis for
them.”
Whistleblower
reports also allege that the FDIC may be abusing its supervisory powers to
deter banks from extending credit to crypto companies.
“According to these reports, FDIC
headquarters employees have contacted FDIC regional office bank examination staff
to question their review of a loan made by a bank to a crypto-related company
and to urge them to downgrade their classification of the loan. It is my
understanding that it is highly atypical for FDIC headquarters personnel to be
involved in reviewing an individual loan. If reports are true that there was
nothing unusual about this loan (other than that it was to a crypto-related
company) and that the loan amount was too small to affect the bank’s
supervisory rating even if it had to write off the entire loan, this episode
raises important questions.”
Ranking Member Toomey concluded by asking
Acting Chairman Gruenberg to turn over documents and answer a number of
questions concerning the FDIC’s actions no later than August 30, 2022.
Read Ranking Member
Toomey’s full letter to Acting Chairman Gruenberg here.
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