The bill from U.S. Sen. Kevin Cramer has growing support to ensure banks use individualized risk-based analysis to offer services instead of blanket withholding for legitimate industries.
02/13/2023 3:05 P.M.
2.5 minute read
The Fair Access to Banking Act, reintroduced in the 118th Congress, is gaining support in the U.S. Senate to prevent banks from denying or limiting services to constitutionally protected industries, according to a press release from bill sponsor U.S. Sen. Kevin Cramer, R-N.D.
Cramer, who serves on the Senate Committee on Banking, Housing and Urban Affairs, has support from 36 Republican senators for the bill, making up more than one-third of the upper chamber.
“There is no place in our society for discrimination, and big banks and financial institutions are no exception. The Biden administration and their liberal base are weaponizing the financial system to defund, debank, or discredit industries they do not like,” Cramer said in the news release. “It is fundamentally unfair. Our bill imposes serious consequences for discriminatory decisions or de facto bans of legal industries.”
ACA International has consistently advocated for passage of the bill and similar legislation in the U.S. House of Representatives.
Credit and collection professionals have had their banking relationships abruptly terminated on numerous other occasions since the inception of Operation Choke Point in the Obama administration. In states where a banking relationship is required to have a license to operate, this can threaten the existence of collection businesses, as well as their employees’ jobs, ACA previously reported. While the number of ACA members impacted by banking terminations has declined since the height of Operation Choke Point, the practice of categorical discrimination from banks against the debt collection industry continues.
“The purpose of the Fair Access to Banking Act is to protect fair access to financial services and to ensure banks operate in a safe and sound manner, basing their judgments and decisions on impartial, individualized risk-based analysis developed through empirical data and evaluated under quantifiable standards,” according to the news release from Cramer’s office.
If enacted, this bill would:
- “Penalize banks and credit unions with over $10 billion in total consolidated assets, or their subsidiaries, if they refuse to do business with any legally-compliant person who meets the criteria described above;
- Prevent payment card networks from discriminating against any qualified and legally-compliant person because of political or reputational considerations;
- Codify the core requirements found in the Trump Administration’s Fair Access Final Rule;
- Require qualified banks to provide written justification for why they are denying a person financial services; and
- Punish providers who fail to comply with the law by disqualifying them from using discount window lending programs, terminating their status as an insured depository institution or insured credit union, or imposing a civil penalty of up to $10,000 per violation.”
In the 117th Congress, U.S. Rep. Andy Barr, R-Ky., introduced similar legislation to protect access to banking. Barr’s “Fair Access to Banking Act” sought to codify the Fair Access Rule from the Comptroller of the Currency, mandating that “banks provide fair access to bank services, capital and credit,” according to a news release from Barr’s office. ACA is following the legislation for introduction in the House this Congress.
ACA previously submitted letters to the Senate Banking Committee and House Financial Services Committee—available on ACA’s Policymakers website—addressing bank oversight and its impact on businesses, and will continue advocacy in support of the bills.
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