What This Bill Does
This bill prevents large banks from refusing to serve customers based on political or reputational concerns when those customers are following the law. The bill blocks banks with more than $10 billion in assets from using certain federal lending programs if they deny fair access to financial services. It also requires payment card networks and credit unions to stop blocking people from financial services based on political or reputational risk.
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Who It Affects
- Banks with more than $10 billion in total assets
- Credit unions with federal insurance or eligibility for it
- Payment card networks (like credit card companies)
- People and businesses legally operating that banks currently refuse to serve
- The Office of the Comptroller of the Currency (federal banking regulator)
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Key Provisions
- Large banks cannot use Federal Reserve discount window lending programs if they refuse to do business with anyone following federal law (Sec. 4)
- Payment card networks cannot block people from using their services for political or reputational reasons when those people follow the law (Sec. 5)
- Large credit unions and banks cannot use the Automated Clearing House Network if they refuse to serve lawful customers (Sec. 7)
- Large banks must make financial services available to all customers in their geographic area on equal terms based on measurable, objective financial risk standards, not on political reasons (Sec. 8(b))
- Banks cannot justify denying services based only on reputational risk to the bank (Sec. 8(b)(2))
- People harmed by violations can sue in federal court without first exhausting administrative complaints and can receive triple damages plus attorney fees if they win (Sec. 8(c))
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What Changes
Banks with $10 billion or more in assets must stop using category-based decisions to block entire groups of lawful customers and instead evaluate each customer individually based on documented financial risk standards. Banks must provide written explanations when denying services. Payment card networks face penalties of up to $10,000 per violation for blocking lawful customers for political reasons. People can now sue banks directly in federal court for violations and recover triple damages.
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Important Definitions
- **Fair access to financial services**: When people engaged in lawful activities can obtain bank services without roadblocks caused by prejudice against them, their business, or favoritism toward competitors (Sec. 8(a)(5))
- **Covered bank**: Banks with $10 billion or more in assets that have power to raise prices or significantly impede a person's business activities (Sec. 8(a)(2))
- **Deny**: To refuse to start or to end a financial services relationship with a person (Sec. 8(a)(4))
- **Financial service**: Commercial banking, lending, financing, leasing, investment management, credit cards, payment processing, securities trading, and insurance products (Sec. 8(a)(6))
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Effective Date
Not specified in bill text
II
118TH CONGRESS
1ST SESSION
S. 293
To amend the Federal Reserve Act to prohibit certain financial service pro-
viders who deny fair access to financial services from using taxpayer
funded discount window lending programs, and for other purposes.
IN THE SENATE OF THE UNITED STATES
FEBRUARY 7, 2023
Mr. CRAMER (for himself, Mrs. BRITT, Mr. TUBERVILLE, Mr. SULLIVAN, Mr.
BOOZMAN, Mr. COTTON, Mr. RUBIO, Mr. SCOTT of Florida, Mr. CRAPO,
Mr. RISCH, Mr. BRAUN, Ms. ERNST, Mr. MARSHALL, Mr. MORAN, Mr.
CASSIDY, Mr. KENNEDY, Mrs. HYDE-SMITH, Mr. WICKER, Mr. SCHMITT,
Mr. DAINES, Mrs. FISCHER, Mr. RICKETTS, Mr. TILLIS, Mr. HOEVEN,
Mr. VANCE, Mr. LANKFORD, Mr. MULLIN, Mr. GRAHAM, Mr. SCOTT of
South Carolina, Mrs. BLACKBURN, Mr. HAGERTY, Mr. CORNYN, Mr.
CRUZ, Mrs. CAPITO, Mr. JOHNSON, Mr. BARRASSO, and Ms. LUMMIS) in-
troduced the following bill; which was read twice and referred to the Com-
mittee on Banking, Housing, and Urban Affairs
A BILL
To amend the Federal Reserve Act to prohibit certain finan-
cial 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 Representa-
1
tives of the United States of America in Congress assembled,
2
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SECTION 1. SHORT TITLE.
1
This Act may be cited as the ‘‘Fair Access to Bank-
2
ing Act’’.
3
SEC. 2. FINDINGS.
4
Congress finds that—
5
(1) article I of the Constitution of the United
6
States guarantees the people of the United States
7
the right to enact public policy through the free and
8
fair election of representatives and through the ac-
9
tions of State legislatures and Congress;
10
(2) banks rightly objected to the Operation
11
Choke Point initiative through which certain govern-
12
ment agencies pressured banks to cut off access to
13
financial services to lawful sectors of the economy;
14
(3) banks are now, however, increasingly em-
15
ploying subjective, category-based evaluations to
16
deny certain persons access to financial services in
17
response to pressure from advocates from across the
18
political spectrum whose policy objectives are served
19
when banks deny certain customers access to finan-
20
cial services;
21
(4) the privatization of the discriminatory prac-
22
tices underlying Operation Choke Point by banks
23
represents as great a threat to the national economy,
24
national security, and the soundness of banking and
25
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•S 293 IS
financial markets in the United States as Operation
1
Choke Point itself;
2
(5) banks are supported by the United States
3
taxpayers and enjoy significant privileges in the fi-
4
nancial system of the United States and should not
5
be permitted to act as de facto regulators or
6
unelected legislators by withholding financial services
7
to otherwise credit worthy businesses based on sub-
8
jective political reasons, bias, or prejudices;
9
(6) banks are not well-equipped to balance risks
10
unrelated to financial exposures and the operations
11
required to deliver financial services;
12
(7) the United States taxpayers came to the aid
13
for large banks during the Great Recession of 2008
14
because they were deemed too important to the na-
15
tional economy to be permitted to fail;
16
(8) when a bank predicates the access to finan-
17
cial services of a person on factors or information
18
(such as the lawful products a customer manufac-
19
tures or sells or the services the customer provides)
20
other than quantitative, impartial risk-based stand-
21
ards, the bank has failed to act consistent with basic
22
principles of sound risk management and failed to
23
provide fair access to financial services;
24
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•S 293 IS
(9) banks have a responsibility to make deci-
1
sions about whether to provide a person with finan-
2
cial services on the basis of impartial criteria free
3
from prejudice or favoritism;
4
(10) while fair access to financial services does
5
not obligate a bank to offer any particular financial
6
service to the public, to operate in any particular ge-
7
ographic area, or to provide a service the bank offers
8
to any particular person, it is necessary that—
9
(A) the financial services a bank chooses to
10
offer in the geographic areas in which the bank
11
operates be made available to all customers
12
based on the quantitative, impartial risk-based
13
standards of the bank, and not based on wheth-
14
er the customer is in a particular category of
15
customers;
16
(B) banks assess the risks posed by indi-
17
vidual customers on a case-by-case basis, rather
18
than category-based assessment; and
19
(C) banks implement controls to manage
20
relationships commensurate with these risks as-
21
sociated with each customer, not a strategy of
22
total avoidance of particular industries or cat-
23
egories of customers;
24
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•S 293 IS
(11) banks are free to provide or deny financial
1
services to any individual customer, but first, the
2
banks must rely on empirical data that are evaluated
3
consistent with the established, impartial risk-man-
4
agement standards of the bank; and
5
(12) anything less is not prudent risk manage-
6
ment and may result in unsafe or unsound practices,
7
denial of fair access to financial services, cancelling,
8
or eliminating certain businesses in society, and have
9
a deleterious effect on national security and the na-
10
tional economy.
11
SEC. 3. PURPOSES.
12
The purposes of this Act are to—
13
(1) ensure fair access to financial services and
14
fair treatment of customers by financial service pro-
15
viders, including national and State banks, Federal
16
savings associations, and State and Federal credit
17
unions;
18
(2) ensure banks conduct themselves in a safe
19
and sound manner, comply with laws and regula-
20
tions, treat their customers fairly, and provide fair
21
access to financial services;
22
(3) protect against banks being able to impede
23
otherwise lawful commerce and thereby achieving
24
certain public policy goals;
25
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•S 293 IS
(4) ensure that persons involved in politically
1
unpopular businesses but that are lawful under Fed-
2
eral law receive fair access to financial services
3
under the law; and
4
(5) ensure banks operate in a safe and sound
5
manner by making judgments and decisions about
6
whether to provide a customer with financial services
7
on an impartial, individualized risk-based analysis
8
using empirical data evaluated under quantifiable
9
standards.
10
SEC. 4. ADVANCES TO INDIVIDUAL MEMBER BANKS.
11
(a) MEMBER BANKS.—Section 10B of the Federal
12
Reserve Act (12 U.S.C. 347b) is amended by adding at
13
the end the following:
14
‘‘(c) PROHIBITION ON USE OF DISCOUNT WINDOW
15
LENDING PROGRAMS.—No member bank with more than
16
$10,000,000,000 in total consolidated assets, or sub-
17
sidiary of the member bank, may use a discount window
18
lending program if the member bank or subsidiary refuses
19
to do business with any person who is in compliance with
20
the law, including section 8 of the Fair Access to Banking
21
Act.’’.
22
(b) INSURED DEPOSITORY INSTITUTIONS.—Section
23
8(a)(2)(A) of the Federal Deposit Insurance Act (12
24
U.S.C. 1818(a)(2)(A)) is amended—
25
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•S 293 IS
(1) in clause (ii), by striking ‘‘or’’ at the end;
1
(2) in clause (iii), by striking the comma at the
2
end and inserting ‘‘; or’’; and
3
(3) by adding at the end the following:
4
‘‘(iv) an insured depository institution
5
with more than $10,000,000,000 in total
6
consolidated assets, or subsidiary of the in-
7
sured depository institution, that refuses to
8
do business with any person who is in com-
9
pliance with the law, including section 8 of
10
the Fair Access to Banking Act,’’.
11
(c) NONMEMBER BANKS, TRUST COMPANIES, AND
12
OTHER DEPOSITORY INSTITUTIONS.—Section 13 of the
13
Federal Reserve Act (12 U.S.C. 342) is amended by in-
14
serting ‘‘Provided further, That no such nonmember bank
15
or trust company or other depository institution with more
16
than $10,000,000,000 in total consolidated assets, or sub-
17
sidiary of such nonmember bank or trust company or
18
other depository institution, may refuse to do business
19
with any person who is in compliance with the law, includ-
20
ing , including section 8 of the Fair Access to Banking
21
Act:’’ after ‘‘appropriate:’’.
22
SEC. 5. PAYMENT CARD NETWORK.
23
(a) DEFINITION.—In this section, the term ‘‘payment
24
card network’’ has the meaning given the term in section
25
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•S 293 IS
921(c) of the Electronic Fund Transfer Act (15 U.S.C.
1
1693o–2(c)).
2
(b) PROHIBITION.—No payment card network, in-
3
cluding a subsidiary of a payment card network, may, di-
4
rectly or through any agent, processor, or licensed member
5
of the network, by contract, requirement, condition, pen-
6
alty, or otherwise, prohibit or inhibit the ability of any per-
7
son who is in compliance with the law, including section
8
8 of this Act, to obtain access to services or products of
9
the payment card network because of political or
10
reputational risk considerations.
11
(c) CIVIL PENALTY.—Any payment card network
12
that violates subsection (b) shall be assessed a civil penalty
13
by the Comptroller of the Currency of not more than 10
14
percent of the value of the services or products described
15
in that subsection, not to exceed $10,000 per violation.
16
SEC. 6. CREDIT UNIONS.
17
Section 206(b)(1) of the Federal Credit Union Act
18
(12 U.S.C. 1786) is amended by inserting ‘‘or is refusing
19
or has refused, or has a subsidiary that is refusing or has
20
refused, to do business with any person who is in compli-
21
ance with the law, including section 8 of the Fair Access
22
to Banking Act,’’ after ‘‘as an insured credit union,’’.
23
SEC. 7. USE OF AUTOMATED CLEARING HOUSE NETWORK.
24
(a) DEFINITIONS.—In this section:
25
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•S 293 IS
(1) COVERED CREDIT UNION.—The term ‘‘cov-
1
ered credit union’’ means—
2
(A) any insured credit union, as defined in
3
section 101 of the Federal Credit Union Act
4
(12 U.S.C. 1752); or
5
(B) any credit union that is eligible to
6
make application to become an insured credit
7
union under section 201 of the Federal Credit
8
Union Act (12 U.S.C. 1781).
9
(2) MEMBER BANK.—The term ‘‘member bank’’
10
has the meaning given the term in the third undesig-
11
nated paragraph of the first section of the Federal
12
Reserve Act (12 U.S.C. 221).
13
(b) PROHIBITION.—No covered credit union, member
14
bank, or State-chartered non-member bank with more
15
than $10,000,000,000 in total consolidated assets, or a
16
subsidiary of the covered credit union, member bank, or
17
State-chartered non-member bank, may use the Auto-
18
mated Clearing House Network if that member bank,
19
credit union, or subsidiary of the member bank or credit
20
union, refuses to do business with any person who is in
21
compliance with the law, including section 8 of this Act.
22
SEC. 8. FAIR ACCESS TO FINANCIAL SERVICES.
23
(a) DEFINITIONS.—In this section:
24
(1) BANK.—The term ‘‘bank’’—
25
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•S 293 IS
(A) means an entity for which the Office
1
of the Comptroller of the Currency is the appro-
2
priate Federal banking agency, as defined in
3
section 3 of the Federal Deposit Insurance Act
4
(12 U.S.C. 1813); and
5
(B) includes—
6
(i) member banks;
7
(ii) non-member banks;
8
(iii) covered credit unions;
9
(iv)
State-chartered
non-member
10
banks; and
11
(v) trust companies.
12
(2) COVERED BANK.—
13
(A) IN
GENERAL.—The term ‘‘covered
14
bank’’ means a bank that has the ability to—
15
(i) raise the price a person has to pay
16
to obtain an offered financial service from
17
the bank or from a competitor; or
18
(ii) significantly impede a person, or
19
the business activities of a person, in favor
20
of or to the advantage of another person.
21
(B) PRESUMPTION.—
22
(i) IN GENERAL.—A bank shall not be
23
presumed to be a covered bank if the bank
24
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•S 293 IS
has less than $10,000,000,000 in total as-
1
sets.
2
(ii) REBUTTABLE PRESUMPTION.—
3
(I) IN GENERAL.—A bank is pre-
4
sumed to be a covered bank if the
5
bank has $10,000,000,000 or more in
6
total assets.
7
(II) REBUTTAL.—A bank that
8
meets the criteria under subclause (I)
9
can seek to rebut this presumption by
10
submitting to the Office of the Comp-
11
troller of the Currency written mate-
12
rials that, in the judgement of the
13
agency, demonstrate the bank does
14
not meet the definition of covered
15
bank.
16
(3) COVERED CREDIT UNION.—The term ‘‘cov-
17
ered credit union’’ means—
18
(A) any insured credit union, as defined in
19
section 101 of the Federal Credit Union Act
20
(12 U.S.C. 1752); or
21
(B) any credit union that is eligible to
22
make application to become an insured credit
23
union under section 201 of the Federal Credit
24
Union Act (12 U.S.C. 1781).
25
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(4) DENY.—The term ‘‘deny’’ means to deny or
1
refuse to enter into or terminate an existing finan-
2
cial services relationship with a person.
3
(5) FAIR ACCESS TO FINANCIAL SERVICES.—
4
The term ‘‘fair access to financial services’’ means
5
persons engaged in activities lawful under Federal
6
law are able to obtain financial services at banks
7
without impediments caused by a prejudice
[Text truncated for display. Full text available on Congress.gov.]