Fair Access to Banking Act
This bill places restrictions on certain banks, credit unions, and payment card networks if they refuse to do business with a person who complies with the law. Restrictions include prohibiting the use of electronic funds transfer systems and lending programs, termination of an institution's depository insurance, and specified civil penalties.
Banks and other specified financial institutions are allowed to deny financial services to a person only if the denial is justified by a documented failure of that person to meet quantitative, impartial, risk-based standards established in advance by the institution. This justification may not be based upon reputational risks to the institution.
The bill establishes the right for a person to bring a civil action for a violation of this bill.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 987 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 987
To amend certain banking laws to prohibit certain financial service
providers who deny fair access to financial services from using
taxpayer funded discount window lending programs, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 5, 2025
Mr. Barr (for himself, Mr. Meuser, Mr. Scott Franklin of Florida, Mr.
Clyde, and Mr. Harrigan) introduced the following bill; which was
referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend certain banking laws to prohibit certain financial service
providers who deny fair access to financial services from using
taxpayer funded discount window lending programs, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fair Access to Banking Act''.
SEC. 2. FINDINGS.
Congress finds that--
(1) article I of the Constitution of the United States
guarantees the people of the United States the right to enact
public policy through the free and fair election of
representatives and through the actions of State legislatures
and Congress;
(2) financial institutions rightly objected to the
Operation Choke Point initiative through which certain
government agencies pressured financial institutions to cut off
access to financial services to lawful sectors of the economy;
(3) in response to pressure from advocates whose policy
objectives are served when financial institutions deny certain
customers access to financial services, financial institutions
are now, however, increasingly employing subjective, category-
based evaluations to deny certain persons access to financial
services;
(4) this privatization of the discriminatory practices
underlying Operation Choke Point by financial institutions
represents as great a threat to the national economy, national
security, and the soundness of banking and financial markets in
the United States as Operation Choke Point itself;
(5) financial institutions are supported by the United
States taxpayers and enjoy significant privileges in the
financial system of the United States and should not be
permitted to act as de facto regulators or unelected
legislators by withholding financial services to otherwise
credit worthy businesses based on subjective political reasons,
bias or prejudices;
(6) financial institutions are not well-equipped to balance
risks unrelated to financial exposures and the operations
required to deliver financial services;
(7) the United States taxpayers came to the aid for large
financial institutions during the great recession of 2008
because they were deemed too important to the national economy
to be permitted to fail;
(8) when a financial institution predicates the access to
financial services of a person on factors or information (such
as the lawful products a customer manufactures or sells or the
services the customer provides) other than quantitative,
impartial risk-based standards, the financial institution has
failed to act consistent with basic principles of sound risk
management and failed to provide fair access to financial
services;
(9) financial institutions have a responsibility to make
decisions about whether to provide a person with financial
services on the basis of impartial criteria free from prejudice
or favoritism;
(10) while fair access to financial services does not
obligate a financial institution to offer any particular
financial service to the public, or to operate in any
particular geographic area, or to provide a service the
financial institution offers to any particular person, it is
necessary that--
(A) the financial services a financial institution
chooses to offer in the geographic areas in which the
financial institution operates be made available to all
customers based on the quantitative, impartial risk-
based standards of the financial institution, and not
based on whether the customer is in a particular
category of customers;
(B) financial institutions assess the risks posed
by individual customers on a case-by-case basis, rather
than category-based assessment; and
(C) financial institutions implement controls to
manage relationships commensurate with these risks
associated with each customer, not a strategy of total
avoidance of particular industries or categories of
customers;
(11) financial institutions are free to provide or deny
financial services to any individual customer, but first, the
financial institutions must rely on empirical data that are
evaluated consistent with the established, impartial risk-
management standards of the financial institution; and
(12) anything less is not prudent risk management and may
result in unsafe or unsound practices, denial of fair access to
financial services, cancelling, or eliminating certain
businesses in society, and have a deleterious effect on
national security and the national economy.
SEC. 3. PURPOSE.
The purposes of this Act are to--
(1) ensure fair access to financial services and fair
treatment of customers by financial service providers,
including national and State banks, Federal savings
associations, and State and Federal credit unions;
(2) ensure financial institutions conduct themselves in a
safe and sound manner, comply with laws and regulations, treat
their customers fairly, and provide fair access to financial
services;
(3) protect against financial institutions being able to
impede otherwise lawful commerce and thereby achieve certain
public policy goals;
(4) ensure that persons involved in politically unpopular
businesses but that are lawful under Federal law receive fair
access to financial services under the law; and
(5) ensure financial institutions operate in a safe and
sound manner by making judgments and decisions about whether to
provide a customer with financial services on an impartial,
individualized risk-based analysis using empirical data
evaluated under quantifiable standards.
SEC. 4. ADVANCES TO INDIVIDUAL MEMBER BANKS.
(a) Member Banks.--Section 10B of the Federal Reserve Act (12
U.S.C. 347b) is amended by adding at the end the following:
``(c) Prohibition on Use of Discount Window Lending Programs.--No
member bank with more than $50,000,000,000 in total consolidated
assets, or subsidiary of the member bank, may use a discount window
lending program if the member bank or subsidiary refuses to do business
with any person who is in compliance with the law, including section 8
of the Fair Access to Banking Act.''.
(b) Insured Depository Institutions.--Section 8(a)(2)(A) of the
Federal Deposit Insurance Act (12 U.S.C. 1818(a)(2)(A)) is amended--
(1) in clause (ii), by striking ``or'' at the end;
(2) in clause (iii), by striking the comma at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(iv) an insured depository institution
with more than $500,000,000,000 in total
consolidated assets, or subsidiary of the
insured depository institution, that refuses to
do business with any person who is in
compliance with the law, including section 8 of
the Fair Access to Banking Act.''.
(c) Nonmember Banks, Trust Companies, and Other Depository
Institutions.--Section 13 of the Federal Reserve Act (12 U.S.C. 342) is
amended by inserting ``Provided further, That no such nonmember bank or
trust company or other depository institution with more than
$50,000,000,000 in total consolidated assets, or subsidiary of such
nonmember bank or trust company or other depository institution, may
refuse to do business with any person who is in compliance with the
law, including, including section 8 of the Fair Access to Banking
Act:'' after ``appropriate:''.
SEC. 5. PAYMENT CARD NETWORKS.
(a) Definition.--In this section, the term ``payment card network''
has the meaning given the term in section 921(c) of the Electronic Fund
Transfer Act (15 U.S.C. 1693o-2(c)).
(b) Prohibition.--No payment card network, including a subsidiary
of a payment card network, may, directly or through any agent,
processor, or licensed member of the network, by contract, requirement,
condition, penalty, or otherwise, prohibit or inhibit the ability of
any person who is in compliance with the law, including section 8 of
this Act, to obtain access to services or products of the payment card
network because of political or reputational risk considerations.
(c) Civil Penalty.--Any payment card network that violates
subsection (b) shall be assessed a civil penalty by the Comptroller of
the Currency of not more than 10 percent of the value of the services
or products described in that subsection, not to exceed $10,000 per
violation.
SEC. 6. CREDIT UNIONS.
Section 206(b)(1) of the Federal Credit Union Act (12 U.S.C. 1786)
is amended by inserting ``or is refusing or has refused, or has a
subsidiary that is refusing or has refused, to do business with any
person who is in compliance with the law, including section 8 of the
Fair Access to Banking Act,'' after ``as an insured credit union,''.
SEC. 7. USE OF AUTOMATED CLEARING HOUSE NETWORK.
(a) Definitions.--In this section:
(1) Covered credit union.--The term ``covered credit
union'' means--
(A) any insured credit union, as defined in section
101 of the Federal Credit Union Act (12 U.S.C. 1752);
or
(B) any credit union that is eligible to make
application to become an insured credit union under
section 201 of the Federal Credit Union Act (12 U.S.C.
1781).
(2) Member bank.--The term ``member bank'' has the meaning
given the term in the third undesignated paragraph of the first
section of the Federal Reserve Act (12 U.S.C. 221).
(b) Prohibition.--No covered credit union, member bank, or State-
chartered non-member bank with more than $50,000,000,000 in total
consolidated assets, or a subsidiary of the covered credit union,
member bank, or State-chartered non-member bank, may use the Automated
Clearing House Network if that member bank, credit union, or subsidiary
of the member bank or credit union, refuses to do business with any
person who is in compliance with the law, including section 8 of this
Act.
SEC. 8. FAIR ACCESS TO FINANCIAL SERVICES.
(a) Definitions.--In this section:
(1) Bank.--The term ``bank''--
(A) means an entity for which the Office of the
Comptroller of the Currency is the appropriate Federal
banking agency, as defined in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813); and
(B) includes--
(i) member banks;
(ii) non-member banks;
(iii) covered credit unions;
(iv) State-chartered non-member banks; and
(v) trust companies.
(2) Covered bank.--
(A) In general.--The term ``covered bank'' means a
bank that has the ability to--
(i) raise the price a person has to pay to
obtain an offered financial service from the
bank or from a competitor; or
(ii) significantly impede a person, or the
business activities of a person, in favor of or
to the advantage of another person.
(B) Presumption.--
(i) In general.--A bank shall not be
presumed to be a covered bank if the bank has
less than $50,000,000,000 in total assets.
(ii) Rebuttable presumption.--
(I) In general.--A bank is presumed
to be a covered bank if the bank has
$50,000,000,000 or more in total
assets.
(II) Rebuttal.--A bank that meets
the criteria under subclause (I) can
seek to rebut this presumption by
submitting to the Office of the
Comptroller of the Currency written
materials that, in the judgement of the
agency, demonstrate the bank does not
meet the definition of covered bank.
(3) Covered credit union.--The term ``covered credit
union'' means--
(A) any insured credit union, as defined in section
101 of the Federal Credit Union Act (12 U.S.C. 1752);
or
(B) any credit union that is eligible to make
application to become an insured credit union under
section 201 of the Federal Credit Union Act (12 U.S.C.
1781).
(4) Deny.--The term ``deny'' means to deny or refuse to
enter into or terminate an existing financial services
relationship with a person.
(5) Fair access to financial services.--The term ``fair
access to financial services'' means persons engaged in
activities lawful under Federal law are able to obtain
financial services at banks without impediments caused by a
prejudice against or dislike for a person or the business of
the customer, products or services sold by the person, or
favoritism for market alternatives to the business of the
person. Refusing to provide or continue to provide financial
services to a person because the person engaged in rude or
harassing conduct toward an employee of a bank is not a
violation of this section.
(6) Financial service.--The term ``financial service''
means a financial product or service, including--
(A) commercial and merchant banking;
(B) lending;
(C) financing;
(D) leasing;
(E) cash, asset and investment management and
advisory services;
(F) credit card services;
(G) payment processing;
(H) security and foreign exchange trading and
brokerage services; and
(I) insurance products.
(7) Member bank.--The term ``member bank'' has the meaning
given the term in the third undesignated paragraph of the first
section of the Federal Reserve Act (12 U.S.C. 221).
(b) Requirements.--
(1) In general.--To provide fair access to financial
services, a covered bank (including a subsidiary of a covered
bank), except as necessary to comply with another provision of
law--
(A) shall make each financial service it offers
available to all persons in the geographic market
served by the covered bank on proportionally equal
terms;
(B) may not deny any person a financial service the
covered bank offers unless the denial is justified by
such quantified and documented failure of the person to
meet quantitative, impartial risk-based standards
established in advance by the covered bank;
(C) may not deny, in coordination with or at the
request of others, any person a financial service the
covered bank offers; and
(D) shall, when denying any person financial
services the covered bank offers, provide written
justification to the person explaining the basis for
the denial, including any specific laws or regulations
the covered bank believes are being violated by the
person or customer, if any.
(2) Justification requirement.--A justification described
in paragraph (1)(D) may not be based solely on the reputational
risk to the covered bank.
(c) Cause of Action for Violations of This Section.--
(1) In general.--Notwithstanding any other provision of
law, a person may commence a civil action in the appropriate
district court of the United States against any covered bank
that violates or fails to comply with the requirements under
this Act, for harm that person suffered as a result of such
violation.
(2) No exhaustion.--It shall not be necessary for a person
to exhaust its administrative remedies before commencing a
civil action under this Act.
(3) Damages.--If a person prevails in a civil action under
this Act, a court shall award the person--
(A) reasonable attorney's fees and costs; and
(B) treble damages.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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