119-s401

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 401 Introduced in Senate

    (IS) ]

<DOC>

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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