The U.S. banking industry is asking the Office of the Comptroller of the Currency (OCC) to establish national banking service standards that would preempt state-specific regulations, according to three people familiar with the matter.

The sources, who requested anonymity as they were discussing private negotiations, said major banks are particularly pushing for a unified U.S. regulatory framework that would clarify how banks make loans, issue bonds, provide investment banking services, and assess anti-money laundering risks, while limiting state oversight of banking operations.

This push for "reasserting national standards," first reported by Reuters, is part of a broader effort by the banking industry to secure more favorable regulatory rules under the Donald Trump administration.

According to the sources, these regulatory changes would reduce operational complexity for banks while also limiting states' ability to interfere with banking operations through so-called "debanking" regulations. Debanking refers to banks allegedly refusing to provide services to specific customers based on political or religious beliefs.

Previously, several states have imposed penalties on banks and prohibited them from conducting business due to their policy positions on social issues such as firearms, climate change, and diversity.

The controversy over national standards has come into focus through a lawsuit involving Bank of America. In 2024, the U.S. Supreme Court ruled that federal law takes precedence over state law for national banks, a principle known as "preemption." This year, major banks have focused their lobbying efforts on defending themselves against debanking allegations, citing unclear rules. Trump signed an executive order on debanking this month aimed at promoting regulatory uniformity.

One source said that after successfully pushing regulators to ease stress tests and capital requirements, emboldened banks are now focusing on promoting "federal law preemption."

All three sources revealed that banks plan to intensify their lobbying efforts after meeting with the OCC earlier this year and pressing on this issue.

The OCC declined to comment.

The Bank Policy Institute stated: "We strongly support the principle of federal law preemption and believe it would be prudent to enact federal fair access legislation or regulations to uniformly address account closure issues nationwide."

The American Bankers Association (ABA) has previously noted that an increasing number of states are considering legislation that ignores existing federal law. These proposals would give state regulators jurisdiction over basic operations of national banks, including deposit-taking, lending, and risk management decisions — which the ABA opposes.

The association has also called on regulators to firmly uphold the principle of "federal law preemption" for national banks. As of publication, it had not responded to requests for comment on this article.

A JPMorgan spokesperson stated: "We support national standards that clearly prohibit political or religious discrimination in banking."

Citigroup, Wells Fargo, Bank of America, and Morgan Stanley all declined to comment, while Goldman Sachs did not respond to requests for comment.

Some banks believe national standards would simplify regulatory rules and break the decades-old system of dual federal and state regulatory oversight.

Federal regulators, particularly the OCC which oversees national banks, have the authority to assert federal law preemption over state law if state laws are deemed to interfere with national bank operations and regulation.

Controversial Rules

Banks have long faced scrutiny from policymakers over their positions on controversial issues.

For example, in 2021 in Texas, JPMorgan, Bank of America, and Goldman Sachs were excluded from the municipal bond market. The state prohibits companies that refuse to provide financing to energy or firearms companies from conducting new business.

The three sources said various directives from Florida, California, Tennessee, and other states have created compliance challenges and business disruptions for banks.

The Republican Attorneys General Association, Democratic Attorneys General Association, and Conference of State Bank Supervisors (CSBS) have not responded to requests for comment on this article.

Some state officials believe bank regulation needs to be tailored to local community needs to protect consumer interests. The CSBS has previously argued that the dual federal-state regulatory structure is crucial for ensuring banking system safety and soundness, protecting consumers, and maintaining market competition, and that relying solely on federal regulation could challenge these objectives.

Sources indicated that state-specific regulations have made operations more difficult for financial institutions in certain regions and forced them to adjust internal policies, problems that national standards would address.

Due to their important role in the economy and their positions on financing issues involving fossil fuels, firearms, and other industries, financial institutions frequently face political criticism. States accuse banks of making politically motivated decisions that deprive legitimate businesses of access to capital, while banks argue they should be allowed to make banking and lending decisions based on their own business models and risk tolerance.