Jefferson Reporter

U.S. Senators Katie Britt and Tim Scott have introduced the Financial Integrity and Regulation Management (FIRM) Act, aiming to eliminate the use of reputational risk as a measure for assessing the safety and soundness of financial institutions. The legislation seeks to prevent debanking practices that hinder access to financial services.

Senator Britt stated, "The practice of debanking is preventing people from accessing their American Dream. I’m proud to support legislation that would shield our banking system from subjective oversight and political agendas." She emphasized the importance of ensuring law-abiding citizens and businesses can access financial services without discrimination.

The FIRM Act proposes removing federal banking agencies' authority to create new rules or guidance based on reputational risk. It also requires these agencies to report to Congress on their efforts to eliminate reputational risk from their supervisory activities.

Chairman Tim Scott highlighted his commitment as Chairman of the Senate Banking Committee, saying, "As Chairman of the Senate Banking Committee, I have made addressing debanking a top priority. This discriminatory and un-American practice should concern everyone, which is why I’ve led my colleagues in working to find tangible solutions."

The proposed legislation has garnered support from various stakeholders, including the American Bankers Association and the Blockchain Association. In a recent committee meeting, Senator Britt expressed concerns about politicization within financial regulation, stating, "It is no secret that our financial regulators have become increasingly politicized over the last four years."

Additionally, Senator Britt is cosponsoring Senator Kevin Cramer's Fair Access to Banking Act, aimed at ensuring fair access to financial services while maintaining safe banking practices.