S. 401: Fair Access to Banking Act
This bill, known as the Fair Access to Banking Act, aims to amend the Federal Reserve Act and related laws to ensure fair access to financial services for all individuals and businesses, particularly those in lawful but politically unpopular sectors. The primary focus is on prohibiting financial service providers, such as banks and credit unions, from denying access based on subjective criteria or political considerations.
Key Provisions
- Definitions and Scope
- A "covered bank" must have total assets of $10 billion or more, which engages in activities that might significantly impact individuals' ability to access financial services.
- This act covers various types of financial institutions, including member banks, non-member banks, credit unions, and payment card networks.
- Denying Access
- Financial institutions must not deny services based on factors unrelated to objective, risk-based assessments.
- If a bank decides to refuse service to an individual or business, they must document the reasons for the denial and ensure it is based on quantifiable, impartial risk-based standards.
- Use of Federal Programs
- Member banks with over $10 billion in assets cannot utilize Federal Reserve discount window lending if they refuse service to compliant individuals.
- Insured depository institutions are similarly prohibited from using specific federal programs if they deny access based on subjective criteria.
- Payment Card Networks
- Payment card networks cannot inhibit lawful individuals or businesses from accessing their services based on reputational risk or political considerations.
- Violations may incur civil penalties up to 10% of the service's value, not exceeding $10,000 per violation.
- Legal Recourse
- Individuals who are denied access can file a civil suit against the financial institution, with the potential for treble damages and reasonable attorney’s fees if they prevail.
- They do not need to exhaust administrative remedies before taking legal action.
Objectives
- To ensure that all lawful businesses and individuals are provided fair access to financial services.
- To prevent banks and financial service providers from acting as regulators or imposing policy goals through denial of services.
- To maintain safety and soundness in the banking sector by requiring impartial and documented risk assessment when making lending decisions.
Rationale
- The bill asserts that subjective evaluations by banks can harm the economy and disrupt lawful business operations.
- It seeks to curb practices reminiscent of the “Operation Choke Point” initiative, which pressured banks to deny services based on the nature of the business rather than risk-based assessments.
- The legislation emphasizes that banks are supported by taxpayer dollars and should therefore serve the public without discrimination based on political or social biases.
Relevant Companies
- JPM (JPMorgan Chase & Co.): As a large financial institution, JPMorgan Chase could be affected in how they assess and provide access to services and manage commercial relationships.
- BAC (Bank of America Corp.): Similar to JPM, Bank of America must comply with the act's regulations regarding fair access and customer service practices.
- GS (Goldman Sachs Group, Inc.): Goldman Sachs may face changes in how they evaluate risk for clients in politically sensitive sectors due to this legislation.
- C (Citigroup Inc.): Compliance with the fair access provisions could impact Citi's business operations and customer service policies.
This is an AI-generated summary of the bill text. There may be mistakes.
Sponsors
43 bill sponsors
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TrackKevin Cramer
Sponsor
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TrackJim Banks
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TrackJohn Barrasso
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TrackMarsha Blackburn
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TrackJohn Boozman
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TrackKatie Boyd Britt
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TrackTed Budd
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TrackShelley Moore Capito
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TrackBill Cassidy
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TrackJohn Cornyn
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TrackTom Cotton
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TrackMike Crapo
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TrackTed Cruz
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TrackJohn R. Curtis
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TrackSteve Daines
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TrackJoni Ernst
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TrackDeb Fischer
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TrackLindsey Graham
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TrackBill Hagerty
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TrackJohn Hoeven
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TrackJon Husted
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TrackCindy Hyde-Smith
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TrackRon Johnson
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TrackJames C. Justice
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TrackJohn Kennedy
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TrackJames Lankford
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TrackCynthia M. Lummis
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TrackRoger Marshall
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TrackDavid McCormick
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TrackAshley Moody
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TrackJerry Moran
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TrackBernie Moreno
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TrackMarkwayne Mullin
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TrackPete Ricketts
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TrackJames E. Risch
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TrackEric Schmitt
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TrackRick Scott
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TrackTim Scott
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TrackTim Sheehy
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TrackDan Sullivan
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TrackThom Tillis
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TrackTommy Tuberville
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TrackRoger F. Wicker
Co-Sponsor
Actions
2 actions
| Date | Action |
|---|---|
| Feb. 04, 2025 | Introduced in Senate |
| Feb. 04, 2025 | Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. |
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