Prison Policy Initiative and allies oppose new banking rule

Trump administration proposes to prohibit banks from considering morality when making loans to the prison industry. We say no.

by Stephen Raher, December 31, 2020

Why do bank regulators care about the private prison industry? Most people would probably respond “they don’t,” and that answer would have been correct until a few months ago when the Office of the Comptroller of the Currency (“OCC”) proposed a troublesome new rule on bank lending.

In recent years, numerous social justice movements have used public education and advocacy to successfully persuade banks to stop financing certain industries like fossil fuel extraction, gunmakers, and private prison companies. In response to these generally beneficial movements, the OCC (an obscure but powerful federal agency) has proposed a rule that would prohibit federally chartered banks from considering non-quantitative aspects of a borrower’s business when making lending decisions. In other words, banks could no longer just say “we have moral or ethical problems with a certain industry and will not lend to such companies anymore.” An excellent general background and commentary on the rule can be found in this blog post by Prof. Adam Levitin (Georgetown Law School).

To be sure, private prisons are an unfortunate development, but the Prison Policy Initiative generally agrees with the assessment of Prof. Ruth Wilson Gilmore that the private prison industry receives disproportionate attention. Like Prof. Gilmore, we agree that private prisons are bad actors, but they do not drive policy and they represent a small sliver of the enormous system of mass incarceration. Still, the OCC’s proposed rule bothers us. We may not prioritize campaigns aimed at the private prison industry, but if our allies want to undertake that work, they should be able to. Plus, some of those campaigns have been successful, and those victories benefit everyone by chipping away at an indefensible and immoral industry.

thumbnail of our comments to the OCC opposing new bank rules So, we decided to speak up. On December 30, joined by a great group of allies (American Friends Service Committee, Beneficial State Foundation, Families Belong Together, Human Rights Defense Center, In the Public Interest, Make the Road New York, MomsRising,, and Worth Rises), we submitted comments in opposition to the proposed rule. With the imminent change in presidential administration, we are hopeful that this bad idea can nipped in the bud.


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