U.S. Sen. Katie Britt (R-Montgomery) recently joined Senate Banking Committee Republicans in introducing the Financial Integrity and Regulation Management (FIRM) Act, which would eliminate all references to reputational risk as a measure to determine the safety and soundness of regulated financial institutions. This practice has led to "debanking."
The legislation would eliminate federal banking agencies' ability to promote new rules or guidance that use reputational risk to supervise or regulate depository institutions and require the agencies to report to Congress on their elimination of reputation risk.
According to Britt, "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," said Britt. "Along with my colleagues, we will end this financial exploitation and ensure law-abiding citizens and businesses have access to financial services."
She said at a recent Senate Banking Committee hearing regarding debanking, "It is no secret that our financial regulators have become increasingly politicized over the last four years. ... When you're prioritizing a social agenda or a political one, instead of actually ensuring that people have an opportunity and access to the American Dream, we've got to call that for what it is. And obviously, our large institutions play a vital role in our country and our banking system. But they need to stick to that—banking, not politics."
Senate Banking Committee chairman Tim Scott (R-S.C.) described debanking as "un-American."
"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. It's clear that federal regulators have abused reputational risk by carrying out a political agenda against federally legal businesses. This legislation, which eliminates all references to reputational risk in regulatory supervision, is the first step in ending debanking once and for all," Scott said.
In Alabama, State Auditor Andrew Sorrell has dealt with debanking, highlighting his struggles in an op-ed last year and commended Britt's efforts to end the discriminatory practice.
"As a victim of political debanking, I'm proud to see Senator Katie Britt leading the fight to pass the FIRM Act which will save Alabamians from experiencing what I went through the last three years," he said in a statement. "As the owner of two gun stores, I was canceled by national credit card companies, credit card processors, and insurance companies for no reason other than the fact that I sold firearms."
He added, "This 'reputational risk' banks were told to factor into their decisions started under President Obama with Operation Choke Point. It is an attempt to drive legally operating businesses out of business by denying them access to basic banking services. This is a discrimination issue—plain and simple. Pro-life organizations, 2nd Amendment groups, Bitcoin Mining operations, and Alabama farmers who refuse to sign climate pledges and transition to electric tractors have all fallen victim to political wokeness and had their banking services cut off. Senator Britt recognizes this as unamerican, and has taken action to address this important issue. I hope everyone recognizes and appreciates Senator Britt's leadership on this issue."
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