New regulator: Health measures, like masks, may hurt banks

The new head of a powerful banking regulator warned that measures meant to contain the spread of the coronavirus — including mandates for the use of masks in public — could endanger the financial system.

Brian P. Brooks took over May 29 as the acting head of the Office of the Comptroller of the Currency, the federal agency that oversees the country’s largest banks. Brooks, a former banker, sent letters to the country’s mayors and governors about the negative effects of restrictions on public activity. Among them, he said: Face masks could lead to more bank robberies.

Brooks’ letter was unusual; banking regulators tend to keep their communications fairly abstract. But Brooks pointed to what he said were specific risks associated with “continued state and local lockdown orders.”

“Certain aspects of these orders potentially threaten the stability and orderly functioning of the financial system,” he wrote.

Citing reports that some places would consider shutting off utility services to businesses that violate lockdown orders, the letter warned that cutting off water and electricity could hurt the value of the properties those businesses occupied. That, in turn, could hurt the banks that held mortgages on them.

Brooks also warned that forcing small businesses to stay closed could harm them financially — perhaps making them unable to pay back their loans. That, too, could harm the banks.

But he saved his most colorful warning for last. “Finally,” Brooks wrote, “lengthy and potentially permanent requirements that individuals wear face masks in many or even all public spaces create the very real risk of increases in bank robberies.”

Referring to reports not cited specifically in the letter, Brooks said that recent “face-covering-related robberies” showed that “broadly applicable face mask requirements are not safe or sustainable on a permanent basis.”

A spokesman for Brooks’ office provided examples. Robberies of banks and other retail stores by people wearing surgical masks have been reported in New Jersey, Massachusetts and Georgia, according to a report by The Hill. A person wearing a surgical mask robbed a convenience store in Connecticut, according to Quartz.

The spokesman, Bryan Hubbard, said that Brooks was not claiming that there had been an increase in robberies overall.