Fair Access to Banking Act

II 117TH CONGRESS 1ST SESSION S. 563 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 MARCH 3, 2021 Mr. CRAMER (for himself, Mrs. BLACKBURN, Mr. DAINES, Mr. KENNEDY, Ms. LUMMIS, Mr. SCOTT of Florida, Mr. TILLIS, Mr. INHOFE, Mr. HOEVEN, Mr. TUBERVILLE, Mr. BARRASSO, Mr. CRUZ, Mr. CASSIDY, Mrs. CAPITO, Mr. CORNYN, Mr. COTTON, Mr. SCOTT of South Carolina, Mr. SULLIVAN, Mr. HAWLEY, Mr. LANKFORD, Mr. BRAUN, Mr. RISCH, Mr. MARSHALL, Mr. WICKER, Mrs. HYDE-SMITH, Mr. CRAPO, and Mrs. FISCHER) intro- duced 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 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Fair Access to Bank- 4 ing Act’’. 5 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 2 •S 563 IS SEC. 2. FINDINGS. 1 Congress finds that— 2 (1) article I of the Constitution of the United 3 States guarantees the people of the United States 4 the right to enact public policy through the free and 5 fair election of representatives and through the ac- 6 tions of State legislatures and Congress; 7 (2) banks rightly objected to the Operation 8 Choke Point initiative through which certain govern- 9 ment agencies pressured banks to cut off access to 10 financial services to lawful sectors of the economy; 11 (3) banks are now, however, increasingly em- 12 ploying subjective, category-based evaluations to 13 deny certain persons access to financial services in 14 response to pressure from advocates from across the 15 political spectrum whose policy objectives are served 16 when banks deny certain customers access to finan- 17 cial services; 18 (4) the privatization of the discriminatory prac- 19 tices underlying Operation Choke Point by banks 20 represents as great a threat to the national economy, 21 national security, and the soundness of banking and 22 financial markets in the United States as Operation 23 Choke Point itself; 24 (5) banks are supported by the United States 25 taxpayers and enjoy significant privileges in the fi- 26 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 3 •S 563 IS nancial system of the United States and should not 1 be permitted to act as de facto regulators or 2 unelected legislators by withholding financial services 3 to otherwise credit worthy businesses based on sub- 4 jective political reasons, bias or prejudices; 5 (6) banks are not well-equipped to balance risks 6 unrelated to financial exposures and the operations 7 required to deliver financial services; 8 (7) the United States taxpayers came to the aid 9 for large banks during the great recession of 2008 10 because they were deemed too important to the na- 11 tional economy to be permitted to fail; 12 (8) when a bank predicates the access to finan- 13 cial services of a person on factors or information 14 (such as the lawful products a customer manufac- 15 tures or sells or the services the customer provides) 16 other than quantitative, impartial risk-based stand- 17 ards, the bank has failed to act consistent with basic 18 principles of sound risk management and failed to 19 provide fair access to financial services; 20 (9) banks have a responsibility to make deci- 21 sions about whether to provide a person with finan- 22 cial services on the basis of impartial criteria free 23 from prejudice or favoritism; 24 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 4 •S 563 IS (10) while fair access to financial services does 1 not obligate a bank to offer any particular financial 2 service to the public, or to operate in any particular 3 geographic area, or to provide a service the bank of- 4 fers to any particular person, it is necessary that— 5 (A) the financial services a bank chooses to 6 offer in the geographic areas in which the bank 7 operates be made available to all customers 8 based on the quantitative, impartial risk-based 9 standards of the bank, and not based on wheth- 10 er the customer is in a particular category of 11 customers; 12 (B) banks assess the risks posed by indi- 13 vidual customers on a case-by-case basis, rather 14 than category-based assessment; and 15 (C) banks implement controls to manage 16 relationships commensurate with these risks as- 17 sociated with each customer, not a strategy of 18 total avoidance of particular industries or cat- 19 egories of customers; 20 (11) banks are free to provide or deny financial 21 services to any individual customer, but first, the 22 banks must rely on empirical data that are evaluated 23 consistent with the established, impartial risk-man- 24 agement standards of the bank; and 25 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 5 •S 563 IS (12) anything less is not prudent risk manage- 1 ment and may result in unsafe or unsound practices, 2 denial of fair access to financial services, cancelling, 3 or eliminating certain businesses in society, and have 4 a deleterious effect on national security and the na- 5 tional economy. 6 SEC. 3. PURPOSE. 7 The purposes of this Act are to— 8 (1) ensure fair access to financial services and 9 fair treatment of customers by financial service pro- 10 viders, including national and state banks, Federal 11 savings associations and State and Federal credit 12 unions; 13 (2) ensure banks conduct themselves in a safe 14 and sound manner, comply with laws and regula- 15 tions, treat their customers fairly, and provide fair 16 access to financial services; 17 (3) protect against banks being able to impede 18 otherwise lawful commerce and thereby achieve cer- 19 tain public policy goals; 20 (4) ensure that persons involved in politically 21 unpopular businesses but that are lawful under Fed- 22 eral law receive fair access to financial services 23 under the law; and 24 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 6 •S 563 IS (5) ensure banks operate in a safe and sound 1 manner by making judgments and decisions about 2 whether to provide a customer with financial services 3 on an impartial, individualized risk-based analysis 4 using empirical data evaluated under quantifiable 5 standards. 6 SEC. 4. ADVANCES TO INDIVIDUAL MEMBER BANKS. 7 (a) MEMBER BANKS.—Section 10B of the Federal 8 Reserve Act (12 U.S.C. 347b) is amended by adding at 9 the end the following: 10 ‘‘(c) PROHIBITION ON USE OF DISCOUNT WINDOW 11 LENDING PROGRAMS.—No member bank with more than 12 $10,000,000,000 in total consolidated assets, or sub- 13 sidiary of the member bank, may use a discount window 14 lending program if the member bank or subsidiary refuses 15 to do business with any person who is in compliance with 16 the law, including section 8 of the Fair Access to Banking 17 Act.’’. 18 (b) INSURED DEPOSITORY INSTITUTIONS.—Section 19 8(a)(2)(A) of the Federal Deposit Insurance Act (12 20 U.S.C. 1818(a)(2)(A)) is amended— 21 (1) in clause (ii), by striking ‘‘or’’ at the end; 22 (2) in clause (iii), by striking the comma at the 23 end and inserting ‘‘; or’’; and 24 (3) by adding at the end the following: 25 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 7 •S 563 IS ‘‘(iv) an insured depository institution 1 with more than $10,000,000,000 in total 2 consolidated assets, or subsidiary of the in- 3 sured depository institution, that refuses to 4 do business with any person who is in com- 5 pliance with the law, including section 8 of 6 the Fair Access to Banking Act.’’. 7 (c) NONMEMBER BANKS, TRUST COMPANIES, AND 8 OTHER DEPOSITORY INSTITUTIONS.—Section 13 of the 9 Federal Reserve Act (12 U.S.C. 342) is amended by in- 10 serting ‘‘Provided further, That no such nonmember bank 11 or trust company or other depository institution with more 12 than $10,000,000,000 in total consolidated assets, or sub- 13 sidiary of such nonmember bank or trust company or 14 other depository institution, may refuse to do business 15 with any person who is in compliance with the law, includ- 16 ing , including section 8 of the Fair Access to Banking 17 Act:’’ after ‘‘appropriate:’’. 18 SEC. 5. PAYMENT CARD NETWORK. 19 (a) DEFINITION.—In this section, the term ‘‘payment 20 card network’’ has the meaning given the term in section 21 921(c) of the Electronic Fund Transfer Act (15 U.S.C. 22 1693o–2(c)). 23 (b) PROHIBITION.—No payment card network, in- 24 cluding a subsidiary of a payment card network, may, di- 25 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 8 •S 563 IS rectly or through any agent, processor, or licensed member 1 of the network, by contract, requirement, condition, pen- 2 alty, or otherwise, prohibit or inhibit the ability of any per- 3 son who is in compliance with the law, including section 4 8 of this Act, to obtain access to services or products of 5 the payment card network because of political or 6 reputational risk considerations. 7 (c) CIVIL PENALTY.—Any payment card network 8 that violates subsection (b) shall be assessed a civil penalty 9 by the Comptroller of the Currency of not more than 10 10 percent of the value of the services or products described 11 in that subsection, not to exceed $10,000 per violation. 12 SEC. 6. CREDIT UNIONS. 13 Section 206(b)(1) of the Federal Credit Union Act 14 (12 U.S.C. 1786) is amended by inserting ‘‘or is refusing 15 or has refused, or has a subsidiary that is refusing or has 16 refused, to do business with any person who is in compli- 17 ance with the law, including section 8 of the Fair Access 18 to Banking Act,’’ after ‘‘as an insured credit union,’’. 19 SEC. 7. USE OF AUTOMATED CLEARING HOUSE NETWORK. 20 (a) DEFINITIONS.—In this section: 21 (1) COVERED CREDIT UNION.—The term ‘‘cov- 22 ered credit union’’ means— 23 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 9 •S 563 IS (A) any insured credit union, as defined in 1 section 101 of the Federal Credit Union Act 2 (12 U.S.C. 1752); or 3 (B) any credit union that is eligible to 4 make application to become an insured credit 5 union under section 201 of the Federal Credit 6 Union Act (12 U.S.C. 1781). 7 (2) MEMBER BANK.—The term ‘‘member bank’’ 8 has the meaning given the term in the third undesig- 9 nated paragraph of the first section of the Federal 10 Reserve Act (12 U.S.C. 221). 11 (b) PROHIBITION.—No covered credit union, member 12 bank, or State-chartered non-member bank with more 13 than $10,000,000,000 in total consolidated assets, or a 14 subsidiary of the covered credit union, member bank, or 15 State-chartered non-member bank, may use the Auto- 16 mated Clearing House Network if that member bank, 17 credit union, or subsidiary of the member bank or credit 18 union, refuses to do business with any person who is in 19 compliance with the law, including section 8 of this Act. 20 SEC. 8. FAIR ACCESS TO FINANCIAL SERVICES. 21 (a) DEFINITIONS.—In this section: 22 (1) BANK.—The term ‘‘bank’’— 23 (A) means an entity for which the Office 24 of the Comptroller of the Currency is the appro- 25 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 10 •S 563 IS priate Federal banking agency, as defined in 1 section 3 of the Federal Deposit Insurance Act 2 (12 U.S.C. 1813); and 3 (B) includes— 4 (i) member banks; 5 (ii) non-member banks; 6 (iii) covered credit unions; 7 (iv) State-chartered non-member 8 banks; and 9 (v) trust companies. 10 (2) COVERED BANK.— 11 (A) IN GENERAL.—The term ‘‘covered 12 bank’’ means a bank that has the ability to— 13 (i) raise the price a person has to pay 14 to obtain an offered financial service from 15 the bank or from a competitor; or 16 (ii) significantly impede a person, or 17 the business activities of a person, in favor 18 of or to the advantage of another person. 19 (B) PRESUMPTION.— 20 (i) IN GENERAL.—A bank shall not be 21 presumed to be a covered bank if the bank 22 has less than $10,000,000,000 in total as- 23 sets. 24 (ii) REBUTTABLE PRESUMPTION.— 25 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 11 •S 563 IS (I) IN GENERAL.—A bank is pre- 1 sumed to be a covered bank if the 2 bank has $10,000,000,000 or more in 3 total assets. 4 (II) REBUTTAL.—A bank that 5 meets the criteria under subclause (I) 6 can seek to rebut this presumption by 7 submitting to the Office of the Comp- 8 troller of the Currency written mate- 9 rials that, in the judgement of the 10 agency, demonstrate the bank does 11 not meet the definition of covered 12 bank. 13 (3) COVERED CREDIT UNION.—The term ‘‘cov- 14 ered credit union’’ means— 15 (A) any insured credit union, as defined in 16 section 101 of the Federal Credit Union Act 17 (12 U.S.C. 1752); or 18 (B) any credit union that is eligible to 19 make application to become an insured credit 20 union under section 201 of the Federal Credit 21 Union Act (12 U.S.C. 1781). 22 (4) DENY.—The term ‘‘deny’’ means to deny or 23 refuse to enter into or terminate an existing finan- 24 cial services relationship with a person. 25 VerDate Sep 11 2014 23:24 Apr 03, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S563.IS S563 kjohnson on DSK79L0C42PROD with BILLS 12 •S 563 IS (5) FAIR ACCESS TO FINANCIAL SERVICES.— 1 The term ‘‘fair access to financial services’’ means 2 persons engaged in activities lawful under Federal 3 law are able to obtain financial services at banks 4 without impediments caused by a prejudice against 5 or dislike for a person or the business of the cus- 6 tomer, products or services sold by the [Text truncated for display. 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