WASHINGTON, D.C. – The Senate Banking, Housing, and Urban Affairs (Banking) Committee held a hearing today to ensure banks and financial institutions make lending and services decisions based on impartial, risk-based analysis, not political or reputational favoritism. In recent years, prominent American banks have engaged in a discriminatory practice, referred to as debanking. Banks and financial institutions have used their economic standing to categorically exclude law-abiding industries by refusing to lend or provide services to them. This includes industries such as firearms, ammunition, crypto, federal prison contractors, and energy producers.
Prior to the hearing, U.S. Senator Kevin Cramer (R-ND), a member of the Senate Banking Committee, reintroduced his Fair Access to Banking Act, which protects fair access to financial services and ensures banks operate in a safe and sound manner. The legislation requires lending and services decisions to be based on impartial, risk-based analysis, not political or reputational favoritism.
Cramer explained his legislation does not require banks to take specific actions, but rather prohibits them from categorically discriminating against legal industries. Cramer noted that the reason “some of the bank presidents, who have never dared say it out loud, tell me they support [the Fair Access to Banking Act] is because they want this burden removed from them. They want this political pressure from their 30-year-old staff or the regulator they fear, or the political movement of the day, or the activist investors trying to impose their values, they want that removed from them.”
“What's your sense of a bill like a Fair Access to Banking Act that again, it's not saying you have to bank this industry,” asked Cramer. “It says you're prohibited from discriminating against. Does this seem like a radical idea?”
“I think the regulators have pushed debanking of industries, which is what you talking about,” replied Mike Ring, President, CEO and Co-Founder of Old Glory Bank. “I think mid-level executives push debanking of individuals for political causes.”
“What needs to be done, consistent with the Act that you have introduced, is simply that there's more transparency and there's more notice when these kinds of [regulatory] decisions are made,” responded Stephen Gannon, a partner at Davis Wright Tremaine, LLP, a financial services expert.“There's been a long sort of volume of executive orders coming out of the [Trump] White House, but one of them revived an executive order from 2019 called 13892. That executive order gives more due process to folks who wish to contest the actions of regulators than the due process clause itself allows.”