Fair Access to Banking Act

I 118TH CONGRESS 1ST SESSION H. R. 2743 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 HOUSE OF REPRESENTATIVES APRIL 20, 2023 Mr. BARR (for himself, Mr. POSEY, Mr. SESSIONS, Mr. MEUSER, Mr. NUNN of Iowa, Mr. OGLES, Mr. DESJARLAIS, Mr. BERGMAN, Mr. BISHOP of North Carolina, Mr. BACON, Mr. AMODEI, Mr. HUIZENGA, Mr. CARTER of Georgia, Mr. WITTMAN, Mr. MOOLENAAR, Mr. TIMMONS, Mr. HUD- SON, Mr. FALLON, Mr. FITZGERALD, Mr. MOONEY, Mr. GOSAR, Mr. WILLIAMS of Texas, Ms. STEFANIK, Mrs. CAMMACK, Mr. ISSA, Mr. RESCHENTHALER, Mrs. LESKO, Mr. ROSE, Mr. EMMER, Mr. BABIN, Mr. CLYDE, Mr. WILSON of South Carolina, Mr. WALBERG, Mr. ZINKE, Mr. BURLISON, Mr. ALLEN, Ms. VAN DUYNE, Mr. GIMENEZ, Mr. LAMBORN, Mr. LAMALFA, Mr. NORMAN, and Mr. DUNN of Florida) introduced the following bill; which was referred to the Committee on Financial Services 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 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2743 IH 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) financial institutions rightly objected to the 11 Operation Choke Point initiative through which cer- 12 tain government agencies pressured financial institu- 13 tions to cut off access to financial services to lawful 14 sectors of the economy; 15 (3) in response to pressure from advocates 16 whose policy objectives are served when financial in- 17 stitutions deny certain customers access to financial 18 services, financial institutions are now, however, in- 19 creasingly employing subjective, category-based eval- 20 uations to deny certain persons access to financial 21 services; 22 (4) this privatization of the discriminatory prac- 23 tices underlying Operation Choke Point by financial 24 institutions represents as great a threat to the na- 25 tional economy, national security, and the soundness 26 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2743 IH of banking and financial markets in the United 1 States as Operation Choke Point itself; 2 (5) financial institutions are supported by the 3 United States taxpayers and enjoy significant privi- 4 leges in the financial system of the United States 5 and should not be permitted to act as de facto regu- 6 lators or unelected legislators by withholding finan- 7 cial services to otherwise credit worthy businesses 8 based on subjective political reasons, bias or preju- 9 dices; 10 (6) financial institutions are not well-equipped 11 to balance risks unrelated to financial exposures and 12 the operations required to deliver financial services; 13 (7) the United States taxpayers came to the aid 14 for large financial institutions during the great re- 15 cession of 2008 because they were deemed too im- 16 portant to the national economy to be permitted to 17 fail; 18 (8) when a financial institution predicates the 19 access to financial services of a person on factors or 20 information (such as the lawful products a customer 21 manufactures or sells or the services the customer 22 provides) other than quantitative, impartial risk- 23 based standards, the financial institution has failed 24 to act consistent with basic principles of sound risk 25 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2743 IH management and failed to provide fair access to fi- 1 nancial services; 2 (9) financial institutions have a responsibility to 3 make decisions about whether to provide a person 4 with financial services on the basis of impartial cri- 5 teria free from prejudice or favoritism; 6 (10) while fair access to financial services does 7 not obligate a financial institution to offer any par- 8 ticular financial service to the public, or to operate 9 in any particular geographic area, or to provide a 10 service the financial institution offers to any par- 11 ticular person, it is necessary that— 12 (A) the financial services a financial insti- 13 tution chooses to offer in the geographic areas 14 in which the financial institution operates be 15 made available to all customers based on the 16 quantitative, impartial risk-based standards of 17 the financial institution, and not based on 18 whether the customer is in a particular category 19 of customers; 20 (B) financial institutions assess the risks 21 posed by individual customers on a case-by-case 22 basis, rather than category-based assessment; 23 and 24 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2743 IH (C) financial institutions implement con- 1 trols to manage relationships commensurate 2 with these risks associated with each customer, 3 not a strategy of total avoidance of particular 4 industries or categories of customers; 5 (11) financial institutions are free to provide or 6 deny financial services to any individual customer, 7 but first, the financial institutions must rely on em- 8 pirical data that are evaluated consistent with the 9 established, impartial risk-management standards of 10 the financial institution; and 11 (12) anything less is not prudent risk manage- 12 ment and may result in unsafe or unsound practices, 13 denial of fair access to financial services, cancelling, 14 or eliminating certain businesses in society, and have 15 a deleterious effect on national security and the na- 16 tional economy. 17 SEC. 3. PURPOSE. 18 The purposes of this Act are to— 19 (1) ensure fair access to financial services and 20 fair treatment of customers by financial service pro- 21 viders, including national and State banks, Federal 22 savings associations, and State and Federal credit 23 unions; 24 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2743 IH (2) ensure financial institutions conduct them- 1 selves in a safe and sound manner, comply with laws 2 and regulations, treat their customers fairly, and 3 provide fair access to financial services; 4 (3) protect against financial institutions being 5 able to impede otherwise lawful commerce and there- 6 by achieve certain public policy goals; 7 (4) ensure that persons involved in politically 8 unpopular businesses but that are lawful under Fed- 9 eral law receive fair access to financial services 10 under the law; and 11 (5) ensure financial institutions operate in a 12 safe and sound manner by making judgments and 13 decisions about whether to provide a customer with 14 financial services on an impartial, individualized 15 risk-based analysis using empirical data evaluated 16 under quantifiable standards. 17 SEC. 4. ADVANCES TO INDIVIDUAL MEMBER BANKS. 18 (a) MEMBER BANKS.—Section 10B of the Federal 19 Reserve Act (12 U.S.C. 347b) is amended by adding at 20 the end the following: 21 ‘‘(c) PROHIBITION ON USE OF DISCOUNT WINDOW 22 LENDING PROGRAMS.—No member bank with more than 23 $100,000,000,000 in total consolidated assets, or sub- 24 sidiary of the member bank, may use a discount window 25 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2743 IH lending program if the member bank or subsidiary refuses 1 to do business with any person who is in compliance with 2 the law, including section 8 of the Fair Access to Banking 3 Act.’’. 4 (b) INSURED DEPOSITORY INSTITUTIONS.—Section 5 8(a)(2)(A) of the Federal Deposit Insurance Act (12 6 U.S.C. 1818(a)(2)(A)) is amended— 7 (1) in clause (ii), by striking ‘‘or’’ at the end; 8 (2) in clause (iii), by striking the comma at the 9 end and inserting ‘‘; or’’; and 10 (3) by adding at the end the following: 11 ‘‘(iv) an insured depository institution 12 with more than $100,000,000,000 in total 13 consolidated assets, or subsidiary of the in- 14 sured depository institution, that refuses to 15 do business with any person who is in com- 16 pliance with the law, including section 8 of 17 the Fair Access to Banking Act.’’. 18 (c) NONMEMBER BANKS, TRUST COMPANIES, AND 19 OTHER DEPOSITORY INSTITUTIONS.—Section 13 of the 20 Federal Reserve Act (12 U.S.C. 342) is amended by in- 21 serting ‘‘Provided further, That no such nonmember bank 22 or trust company or other depository institution with more 23 than $100,000,000,000 in total consolidated assets, or 24 subsidiary of such nonmember bank or trust company or 25 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 2743 IH other depository institution, may refuse to do business 1 with any person who is in compliance with the law, includ- 2 ing, including section 8 of the Fair Access to Banking 3 Act:’’ after ‘‘appropriate:’’. 4 SEC. 5. PAYMENT CARD NETWORKS. 5 (a) DEFINITION.—In this section, the term ‘‘payment 6 card network’’ has the meaning given the term in section 7 921(c) of the Electronic Fund Transfer Act (15 U.S.C. 8 1693o–2(c)). 9 (b) PROHIBITION.—No payment card network, in- 10 cluding a subsidiary of a payment card network, may, di- 11 rectly or through any agent, processor, or licensed member 12 of the network, by contract, requirement, condition, pen- 13 alty, or otherwise, prohibit or inhibit the ability of any per- 14 son who is in compliance with the law, including section 15 8 of this Act, to obtain access to services or products of 16 the payment card network because of political or 17 reputational risk considerations. 18 (c) CIVIL PENALTY.—Any payment card network 19 that violates subsection (b) shall be assessed a civil penalty 20 by the Comptroller of the Currency of not more than 10 21 percent of the value of the services or products described 22 in that subsection, not to exceed $10,000 per violation. 23 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 2743 IH SEC. 6. CREDIT UNIONS. 1 Section 206(b)(1) of the Federal Credit Union Act 2 (12 U.S.C. 1786) is amended by inserting ‘‘or is refusing 3 or has refused, or has a subsidiary that is refusing or has 4 refused, to do business with any person who is in compli- 5 ance with the law, including section 8 of the Fair Access 6 to Banking Act,’’ after ‘‘as an insured credit union,’’. 7 SEC. 7. USE OF AUTOMATED CLEARING HOUSE NETWORK. 8 (a) DEFINITIONS.—In this section: 9 (1) COVERED CREDIT UNION.—The term ‘‘cov- 10 ered credit union’’ means— 11 (A) any insured credit union, as defined in 12 section 101 of the Federal Credit Union Act 13 (12 U.S.C. 1752); or 14 (B) any credit union that is eligible to 15 make application to become an insured credit 16 union under section 201 of the Federal Credit 17 Union Act (12 U.S.C. 1781). 18 (2) MEMBER BANK.—The term ‘‘member bank’’ 19 has the meaning given the term in the third undesig- 20 nated paragraph of the first section of the Federal 21 Reserve Act (12 U.S.C. 221). 22 (b) PROHIBITION.—No covered credit union, member 23 bank, or State-chartered non-member bank with more 24 than $100,000,000,000 in total consolidated assets, or a 25 subsidiary of the covered credit union, member bank, or 26 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 2743 IH State-chartered non-member bank, may use the Auto- 1 mated Clearing House Network if that member bank, 2 credit union, or subsidiary of the member bank or credit 3 union, refuses to do business with any person who is in 4 compliance with the law, including section 8 of this Act. 5 SEC. 8. FAIR ACCESS TO FINANCIAL SERVICES. 6 (a) DEFINITIONS.—In this section: 7 (1) BANK.—The term ‘‘bank’’— 8 (A) means an entity for which the Office 9 of the Comptroller of the Currency is the appro- 10 priate Federal banking agency, as defined in 11 section 3 of the Federal Deposit Insurance Act 12 (12 U.S.C. 1813); and 13 (B) includes— 14 (i) member banks; 15 (ii) non-member banks; 16 (iii) covered credit unions; 17 (iv) State-chartered non-member 18 banks; and 19 (v) trust companies. 20 (2) COVERED BANK.— 21 (A) IN GENERAL.—The term ‘‘covered 22 bank’’ means a bank that has the ability to— 23 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 2743 IH (i) raise the price a person has to pay 1 to obtain an offered financial service from 2 the bank or from a competitor; or 3 (ii) significantly impede a person, or 4 the business activities of a person, in favor 5 of or to the advantage of another person. 6 (B) PRESUMPTION.— 7 (i) IN GENERAL.—A bank shall not be 8 presumed to be a covered bank if the bank 9 has less than $100,000,000,000 in total 10 assets. 11 (ii) REBUTTABLE PRESUMPTION.— 12 (I) IN GENERAL.—A bank is pre- 13 sumed to be a covered bank if the 14 bank has $100,000,000,000 or more 15 in total assets. 16 (II) REBUTTAL.—A bank that 17 meets the criteria under subclause (I) 18 can seek to rebut this presumption by 19 submitting to the Office of the Comp- 20 troller of the Currency written mate- 21 rials that, in the judgement of the 22 agency, demonstrate the bank does 23 not meet the definition of covered 24 bank. 25 VerDate Sep 11 2014 07:07 Apr 26, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2743.IH H2743 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 2743 IH (3) 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 [Text truncated for display. 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