My name is Benjamin Zycher. I am a resident scholar at the American Enterprise Institute in Washington, D.C. This letter responds to a request from the Office of the Comptroller of the Currency for comments on its proposed “Fair Access to Bank Services, Capital and Credit” rule (hereinafter referenced as the “Fair Capital Access” rule), the purpose of which is “to ensure that national banks and Federal savings associations offer and provide fair access to financial services.” I support this proposed rule strongly for the following summary reasons.

• The proposed rule would promote efficiency in resource allocation, that is, an economy larger rather than smaller.

• The “reputation risk” justification for lending discrimination against certain economic sectors is wholly circular at a conceptual level, and is purely political in that it is based upon a political unpopularity premise inconsistent with the observed failure of Congress to enact the lending constraints favored by the proponents of that lending discrimination.

• The proposed rule would improve the efficiency of resource allocation by borrowers as well as lenders.

• Lending discrimination against particular economic sectors is inconsistent with the structure and central purposes of the Constitution, and with the proper function of democratic institutions.

• The proposed rule will help to preserve the soundness of the banking/financial system.

• Efforts to discriminate against or to impose higher borrowing costs upon particular borrowers are likely to violate the antitrust laws, creating legal risks for the banks and savings associations themselves.

• The “stranded asset” argument for discrimination against fossil-fuel producers is false.

• Discrimination in lending inexorably will reduce wages over time.

• The proposed rule appropriately would constrain the effects of political pressures to engage in discrimination, as forbearance of such negative favoritism in lending in effect would ratify the political pressures exerted by the opponents of fossil fuels, firearms producers, and other disfavored borrowers, despite the fact that their activities are wholly legal. It shunts aside also the reality that such lenders enjoy deposit insurance provided by government and otherwise are constrained by numerous policies, laws, and regulations.

The proposed Fair Capital Access rule, by imposing a nondiscrimination constraint upon lending decisions by banks and national savings associations, would stabilize the industrial structure of the capital market, improve the allocation of capital, and yield a wealthier economy over time. I urge the Office of the Comptroller of the Currency to finalize this proposed rule in its current form.