The Senate Banking and Insurance Committee held a public hearing on the Equality in Financial Services Act on Wednesday.
The legislation by State Sen. Andrew Jones (R-Centre) would prohibit large financial institutions and insurers from using a “social credit score and other nonquantitative or biased factors” to deny service.
“This bill has to do with an issue that’s commonly referred to as debanking. That’s where accounts are closed, credit is not extended, insurance is not extended or is canceled not because of normal risk factors. In other words, not because you have bad credit, or you bounce checks or you don’t pay your bills but because of ideological reasons,” Jones said during the public hearing on Wednesday.
“So, you don’t do things that comply with some corporation’s definition of what you should be doing and a lot of times these places are using social credit scores which is like ESG governance type things to score people and they cover all sorts of things," he continued. "Facilitating abortions, for example, or perhaps you sell firearms at your store, any number of things that are all expounded upon in the bill. So what we want to do is make sure folks' accounts aren’t being closed down because of their personal beliefs and their beliefs of protecting the Constitution. I think we’ve done a good job of doing that. If there’s any complaints by a consumer, it first has to go before the banking commission or the insurance commission before there’s a right of action. I personally believe that the right of action in here, the fines that are imposed are very, very lenient in my opinion. I don’t think they’re very strict at all.”
The bill applies to a bank with total assets of over $20 billion or a payment processor or credit card company that processed over $20 billion in transactions over the last calendar year.
Speakers from various conservative organizations supported the legislation, while representatives from the banking and insurance industry opposed it.
Mike Hill, superintendent of the Alabama State Banking Department, said during the hearing, “Most banks are going to be opposed to this legislation.”
“It’s one of these bills where, and I hate to say it because I’m not anti-trial lawyer, this is going to be a dream bill for the trial lawyers in the state of Alabama,” he added.
Punishment of financial institutions who violate the act includes “levying fines of actual damages suffered by the complainant or ten thousand dollars ($10,000), whichever is greater” or the greater of triple the damages or a $30,000 fine if the violations are found to be willful.
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