[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 401 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 401
To amend the Federal Reserve Act to prohibit certain financial service
providers 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 4, 2025
Mr. Cramer (for himself, Mr. Banks, Mr. Barrasso, Mrs. Blackburn, Mr.
Boozman, Mrs. Britt, Mr. Budd, Mrs. Capito, Mr. Cassidy, Mr. Cornyn,
Mr. Cotton, Mr. Crapo, Mr. Cruz, Mr. Curtis, Mr. Daines, Ms. Ernst,
Mrs. Fischer, Mr. Graham, Mr. Hagerty, Mr. Hoeven, Mrs. Hyde-Smith, Mr.
Johnson, Mr. Justice, Mr. Kennedy, Mr. Lankford, Ms. Lummis, Mr.
Marshall, Mr. McCormick, Mr. Moran, Mr. Moreno, Mr. Mullin, Mr.
Ricketts, Mr. Risch, Mr. Schmitt, Mr. Scott of Florida, Mr. Scott of
South Carolina, Mr. Sheehy, Mr. Sullivan, Mr. Tillis, Mr. Tuberville,
and Mr. Wicker) introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Federal Reserve Act to prohibit certain financial 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 Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fair Access to Banking Act''.
SEC. 2. FINDINGS.
Congress finds that--
(1) article I of the Constitution of the United States
guarantees the people of the United States the right to enact
public policy through the free and fair election of
representatives and through the actions of State legislatures
and Congress;
(2) banks rightly objected to the Operation Choke Point
initiative through which certain government agencies pressured
banks to cut off access to financial services to lawful sectors
of the economy;
(3) banks are now, however, increasingly employing
subjective, category-based evaluations to deny certain persons
access to financial services in response to pressure from
advocates from across the political spectrum whose policy
objectives are served when banks deny certain customers access
to financial services;
(4) the privatization of the discriminatory practices
underlying Operation Choke Point by banks represents as great a
threat to the national economy, national security, and the
soundness of banking and financial markets in the United States
as Operation Choke Point itself;
(5) banks are supported by the United States taxpayers and
enjoy significant privileges in the financial system of the
United States and should not be permitted to act as de facto
regulators or unelected legislators by withholding financial
services to otherwise credit worthy businesses based on
subjective political reasons, bias, or prejudices;
(6) banks are not well-equipped to balance risks unrelated
to financial exposures and the operations required to deliver
financial services;
(7) the United States taxpayers came to the aid for large
banks during the Great Recession of 2008 because they were
deemed too important to the national economy to be permitted to
fail;
(8) when a bank predicates the access to financial services
of a person on factors or information (such as the lawful
products a customer manufactures or sells or the services the
customer provides) other than quantitative, impartial risk-
based standards, the bank has failed to act consistent with
basic principles of sound risk management and failed to provide
fair access to financial services;
(9) banks have a responsibility to make decisions about
whether to provide a person with financial services on the
basis of impartial criteria free from prejudice or favoritism;
(10) while fair access to financial services does not
obligate a bank to offer any particular financial service to
the public, to operate in any particular geographic area, or to
provide a service the bank offers to any particular person, it
is necessary that--
(A) the financial services a bank chooses to offer
in the geographic areas in which the bank operates be
made available to all customers based on the
quantitative, impartial risk-based standards of the
bank, and not based on whether the customer is in a
particular category of customers;
(B) banks assess the risks posed by individual
customers on a case-by-case basis, rather than
category-based assessment; and
(C) banks implement controls to manage
relationships commensurate with these risks associated
with each customer, not a strategy of total avoidance
of particular industries or categories of customers;
(11) banks are free to provide or deny financial services
to any individual customer, but first, the banks must rely on
empirical data that are evaluated consistent with the
established, impartial risk-management standards of the bank;
and
(12) anything less is not prudent risk management and may
result in unsafe or unsound practices, denial of fair access to
financial services, cancelling, or eliminating certain
businesses in society, and have a deleterious effect on
national security and the national economy.
SEC. 3. PURPOSES.
The purposes of this Act are to--
(1) ensure fair access to financial services and fair
treatment of customers by financial service providers,
including national and State banks, Federal savings
associations, and State and Federal credit unions;
(2) ensure banks conduct themselves in a safe and sound
manner, comply with laws and regulations, treat their customers
fairly, and provide fair access to financial services;
(3) protect against banks being able to impede otherwise
lawful commerce and thereby achieving certain public policy
goals;
(4) ensure that persons involved in politically unpopular
businesses but that are lawful under Federal law receive fair
access to financial services under the law; and
(5) ensure banks operate in a safe and sound manner by
making judgments and decisions about whether to provide a
customer with financial services on an impartial,
individualized risk-based analysis using empirical data
evaluated under quantifiable standards.
SEC. 4. ADVANCES TO INDIVIDUAL MEMBER BANKS.
(a) Member Banks.--Section 10B of the Federal Reserve Act (12
U.S.C. 347b) is amended by adding at the end the following:
``(c) Prohibition on Use of Discount Window Lending Programs.--No
member bank with more than $10,000,000,000 in total consolidated
assets, or subsidiary of the member bank, may use a discount window
lending program if the member bank or subsidiary refuses to do business
with any person who is in compliance with the law, including section 8
of the Fair Access to Banking Act.''.
(b) Insured Depository Institutions.--Section 8(a)(2)(A) of the
Federal Deposit Insurance Act (12 U.S.C. 1818(a)(2)(A)) is amended--
(1) in clause (ii), by striking ``or'' at the end;
(2) in clause (iii), by striking the comma at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(iv) an insured depository institution
with more than $10,000,000,000 in total
consolidated assets, or subsidiary of the
insured depository institution, that refuses to
do business with any person who is in
compliance with the law, including section 8 of
the Fair Access to Banking Act,''.
(c) Nonmember Banks, Trust Companies, and Other Depository
Institutions.--Section 13 of the Federal Reserve Act (12 U.S.C. 342) is
amended by inserting ``Provided further, That no such nonmember bank or
trust company or other depository institution with more than
$10,000,000,000 in total consolidated assets, or subsidiary of such
nonmember bank or trust company or other depository institution, may
refuse to do business with any person who is in compliance with the
law, including , including section 8 of the Fair Access to Banking
Act:'' after ``appropriate:''.
SEC. 5. PAYMENT CARD NETWORK.
(a) Definition.--In this section, the term ``payment card network''
has the meaning given the term in section 921(c) of the Electronic Fund
Transfer Act (15 U.S.C. 1693o-2(c)).
(b) Prohibition.--No payment card network, including a subsidiary
of a payment card network, may, directly or through any agent,
processor, or licensed member of the network, by contract, requirement,
condition, penalty, or otherwise, prohibit or inhibit the ability of
any person who is in compliance with the law, including section 8 of
this Act, to obtain access to services or products of the payment card
network because of political or reputational risk considerations.
(c) Civil Penalty.--Any payment card network that violates
subsection (b) shall be assessed a civil penalty by the Comptroller of
the Currency of not more than 10 percent of the value of the services
or products described in that subsection, not to exceed $10,000 per
violation.
SEC. 6. CREDIT UNIONS.
Section 206(b)(1) of the Federal Credit Union Act (12 U.S.C. 1786)
is amended by inserting ``or is refusing or has refused, or has a
subsidiary that is refusing or has refused, to do business with any
person who is in compliance with the law, including section 8 of the
Fair Access to Banking Act,'' after ``as an insured credit union,''.
SEC. 7. USE OF AUTOMATED CLEARING HOUSE NETWORK.
(a) Definitions.--In this section:
(1) Covered credit union.--The term ``covered credit
union'' means--
(A) any insured credit union, as defined in section
101 of the Federal Credit Union Act (12 U.S.C. 1752);
or
(B) any credit union that is eligible to make
application to become an insured credit union under
section 201 of the Federal Credit Union Act (12 U.S.C.
1781).
(2) Member bank.--The term ``member bank'' has the meaning
given the term in the third undesignated paragraph of the first
section of the Federal Reserve Act (12 U.S.C. 221).
(b) Prohibition.--No covered credit union, member bank, or State-
chartered non-member bank with more than $10,000,000,000 in total
consolidated assets, or a subsidiary of the covered credit union,
member bank, or State-chartered non-member bank, may use the Automated
Clearing House Network if that member bank, credit union, or subsidiary
of the member bank or credit union, refuses to do business with any
person who is in compliance with the law, including section 8 of this
Act.
SEC. 8. FAIR ACCESS TO FINANCIAL SERVICES.
(a) Definitions.--In this section:
(1) Bank.--The term ``bank''--
(A) means an entity for which the Office of the
Comptroller of the Currency is the appropriate Federal
banking agency, as defined in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813); and
(B) includes--
(i) member banks;
(ii) non-member banks;
(iii) covered credit unions;
(iv) State-chartered non-member banks; and
(v) trust companies.
(2) Covered bank.--
(A) In general.--The term ``covered bank'' means a
bank that has the ability to--
(i) raise the price a person has to pay to
obtain an offered financial service from the
bank or from a competitor; or
(ii) significantly impede a person, or the
business activities of a person, in favor of or
to the advantage of another person.
(B) Presumption.--
(i) In general.--A bank shall not be
presumed to be a covered bank if the bank has
less than $10,000,000,000 in total assets.
(ii) Rebuttable presumption.--
(I) In general.--A bank is presumed
to be a covered bank if the bank has
$10,000,000,000 or more in total
assets.
(II) Rebuttal.--A bank that meets
the criteria under subclause (I) can
seek to rebut this presumption by
submitting to the Office of the
Comptroller of the Currency written
materials that, in the judgement of the
agency, demonstrate the bank does not
meet the definition of covered bank.
(3) Covered credit union.--The term ``covered credit
union'' means--
(A) any insured credit union, as defined in section
101 of the Federal Credit Union Act (12 U.S.C. 1752);
or
(B) any credit union that is eligible to make
application to become an insured credit union under
section 201 of the Federal Credit Union Act (12 U.S.C.
1781).
(4) Deny.--The term ``deny'' means to deny or refuse to
enter into or terminate an existing financial services
relationship with a person.
(5) Fair access to financial services.--The term ``fair
access to financial services'' means persons engaged in
activities lawful under Federal law are able to obtain
financial services at banks without impediments caused by a
prejudice against or dislike for a person or the business of
the customer, products or services sold by the person, or
favoritism for market alternatives to the business of the
person.
(6) Financial service.--The term ``financial service''
means a financial product or service, including--
(A) commercial and merchant banking;
(B) lending;
(C) financing;
(D) leasing;
(E) cash, asset, and investment management and
advisory services;
(F) credit card services;
(G) payment processing;
(H) security and foreign exchange trading and
brokerage services; and
(I) insurance products.
(7) Member bank.--The term ``member bank'' has the meaning
given the term in the third undesignated paragraph of the first
section of the Federal Reserve Act (12 U.S.C. 221).
(8) Person.--The term ``person''--
(A) means--
(i) any natural person; or
(ii) any partnership, corporation, or other
business or legal entity; and
(B) includes a customer.
(b) Requirements.--
(1) In general.--To provide fair access to financial
services, a covered bank, including a subsidiary of a covered
bank, shall, except as necessary to comply with another
provision of law--
(A) make each financial service the covered bank
offers available to all persons in the geographic
market served by the covered bank on proportionally
equal terms;
(B) not deny any person a financial service the
covered bank offers unless the denial is justified by
such quantified and documented failure of the person to
meet quantitative, impartial risk-based standards
established in advance by the covered bank;
(C) not deny, in coordination with or at the
request of others, any person a financial service the
covered bank offers; and
(D) when denying any person financial services the
covered bank offers, provide written justification to
the person explaining the basis for the denial,
including any specific laws or regulations the covered
bank believes are being violated by the person or
customer.
(2) Justification requirement.--A justification described
in paragraph (1)(D) may not be based solely on the reputational
risk to the covered bank.
(c) Cause of Action for Violations of This Section.--
(1) In general.--Notwithstanding any other provision of
law, a person may commence a civil action in the appropriate
district court of the United States against any covered bank or
covered credit union that violates or fails to comply with the
requirements under this section, for harm that person suffered
as a result of such violation.
(2) No exhaustion.--It shall not be necessary for a person
to exhaust its administrative remedies before commencing a
civil action under this section.
(3) Damages.--If a person prevails in a civil action under
this section, a court shall award the person--
(A) reasonable attorney's fees and costs; and
(B) treble damages.
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