U.S. Senators Katie Britt, Tim Scott Lead Effort to Combat Debanking

WASHINGTON, D.C. – U.S. Senator Katie Britt (R-Ala.) and Chairman Tim Scott (R-S.C.), along with all Banking Committee Republicans, recently introduced the Financial Integrity and Regulation Management (FIRM) Act, which would eliminate all references to reputational risk as a measure to determine the safety and soundness of regulated financial institutions.

“The practice of debanking is preventing people from accessing their American Dream. I’m proud to support legislation that would shield our banking system from subjective oversight and political agendas,” said Senator Britt. “Along with my colleagues, we will end this financial exploitation and ensure law-abiding citizens and businesses have access to financial services.”

In addition, the FIRM Act would eliminate the Federal banking agencies’ ability to promulgate new rules or guidance that use reputational risk to supervise or regulate depository institutions and require the Federal banking agencies to report to Congress on their elimination of reputation risk as a component of the supervision of depository institutions.

“As Chairman of the Senate Banking Committee, I have made addressing debanking a top priority. This discriminatory and un-American practice should concern everyone, which is why I’ve led my colleagues in working to find tangible solutions. It’s clear that federal regulators have abused reputational risk by carrying out a political agenda against federally legal businesses. This legislation, which eliminates all references to reputational risk in regulatory supervision, is the first step in ending debanking once and for all,” said Chairman Scott.

The FIRM Act is a first step in ending the practice of debanking, and since introduced, has received wide support from stakeholders such as the American Bankers Association, the Bank Policy Institute, the Financial Services Forum, the Blockchain Association, and the Online Lenders Alliance. Read the full text of the legislation here.

In a recent Senate Banking Committee, Senator Britt again highlighted her concern about debanking saying, “It is no secret that our financial regulators have becoming increasingly politicized over the last four years . . . When you’re prioritizing a social agenda or a political one, instead of actually ensuring that people have an opportunity and access to the American Dream, we’ve got to call that for what it is. And obviously, our large institutions play a vital role in our country and our banking system. But they need to stick to that—banking, not politics . . . ”

Senator Britt recently reiterated her intent to “get to the bottom and better understand what spurred this debanking, and why certain industries and conservative aligned groups have been targeted over others, and importantly, how we can prevent this moving forward.” Senator Britt is also a cosponsor of Senator Kevin Cramer’s (R-N.Dak.) Fair Access to Banking Act, which protects fair access to financial services and ensures banks operate in a safe and sound manner.

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