Chairman, Tim Scott (R-SC) of U.S. Senate Committee on Banking, Housing, and Urban Affairs. | https://www.banking.senate.gov/about/ranking-member
Chairman, Tim Scott (R-SC) of U.S. Senate Committee on Banking, Housing, and Urban Affairs. | https://www.banking.senate.gov/about/ranking-member
Chairman Tim Scott (R-S.C.) has introduced new legislation aimed at removing reputational risk from regulatory supervision. The Financial Integrity and Regulation Management Act seeks to prevent regulators from using reputational risk as a means to discriminate against federally legal businesses, thereby addressing the issue of debanking.
The bill has garnered support from various stakeholders, including major financial organizations such as the American Bankers Association, the Bank Policy Institute, the Financial Services Forum, and the Blockchain Association. Additionally, industries that have experienced debanking, like the ATM Industry Association and the National Pawnbrokers Association, along with a coalition of 26 state financial officers, have expressed their approval.
Rob Nichols of the American Bankers Association stated: “America’s banks are in the business of providing financial services to as many individuals and businesses as possible. The FIRM Act restores banks’ freedom to make their own decisions about who they can and cannot bank by limiting regulators’ ability to use subjective concerns about ‘reputational risk’.”
Greg Baer from the Bank Policy Institute noted: "BPI supports the FIRM Act as an important step toward restoring fairness and integrity in how the regulators oversee the banking industry."
Kevin Fromer of the Financial Services Forum commented: "We thank Chairman Scott for introducing the Financial Integrity and Regulation Management Act. This bill would provide needed clarity for a more predictable regulatory environment."
Kristin Smith from the Blockchain Association added: “Debanking lawful companies and individuals on the basis of the industry they work in is a pernicious practice Senator Scott is rightfully working to end.”
A coalition of 26 state financial officers also voiced their support in a letter, stating that politicized debanking poses a threat to both national economy and financial institutions.
All Republican members of the Banking Committee have joined Chairman Scott in supporting this legislation.
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