Hearings to examine ensuring fair access to banking, focusing on policy levers and legislative solutions.
Financial Institutions and Regulatory Relief
2025-12-16
Source: Congress.gov
Summary
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Participants
Transcript
Good afternoon, and welcome to today's hearing entitled, Ensuring Fair Access to Banking, Policy Levers and Legislative Solutions. I want to thank Ranking Member Cortez Masto, this is our first hearing, for working with me to hold this hearing, and for the witnesses and your willingness to testify and to do the preparation that's necessary before this hearing. Law-abiding Americans and U.S. businesses deserve to be banked, full stop. Every day, Americans and U.S. companies rely on core banking services, deposit taking, checking, lending, and transaction processing to go about their daily lives.
not because of risk or credit worthiness or illegal activity, but because of politics, religious beliefs, or involvement in a legal but disavowed industry, we have a serious problem that demands congressional action. Debanking exists in two primary forms. The first happens in open and in an easy way to spot, financial institution initiated debanking, and that occurs when a bank or a credit union voluntarily reduces or outright severs a banking relationship as a part of a political calculation, or maybe from board pressure, activist board members. Often this action occurs in the face of activist pressure, And U.S. energy companies, firearms manufacturers and dealers, and digital asset companies have borne the brunt of this harmful practice over the recent decades. The second form, regulator-initiated debanking, is more opaque and I think in many ways more sinister. Using the regulatory apparatus at their disposal, provincial regulators pressure, coerce, or direct financial institutions to terminate relationships with certain customers or industries. Infamously, Operation Choke Point under the Obama administration saw the Department of Justice and the FDIC systematically target firearms dealers, ammunition retailers, payday lenders, and other legal businesses they found politically objectionable. More recently, the Biden administration deployed a similar playbook against the digital asset industry in what many called Chokepoint 2.0.
First, it establishes a strong federal fair access standard that prohibits denying core banking services based on First Amendment protected activities or the business type of a legally operating enterprise. By enacting this standard, Congress would provide regulatory clarity and uniformity for customers and financial institutions nationwide. Importantly, the bill preserves the bank's legitimate financial and risk management discretion through exceptions for safety and soundness, profitability considerations, risk assessment, and ongoing compliance with existing laws and regulations. Second, my discussion draft permanently repeals the use of reputational risk in examination and supervision. By incorporating Chairman Scott's FIRM Act, we can ensure that regulators no longer use this amorphous standard to pressure banks into debanking customers that a future administration disfavors. Third, the legislation implements targeted reforms to bring transparency and accountability to the examination process. It allows select members of Congress to request confidential supervisory information, giving us the ability to conduct meaningful oversight of examiner conduct.
Finally, the bill modernizes outdated anti-money laundering thresholds that haven't been adjusted since the 1970s and the 1990s. These hard caps, when leisure suits were popular and gas was about 49 cents a gallon, now capture routine transactions and increase the likelihood that ordinary customers are misflagged for account closures over standard lawful activity. Taken as a whole, the Ensuring Fairness Access to Banking Act of 2025 represents a systematic approach to addressing the dual forces in debanking and regulatory levers that have enabled it to occur. I want to thank our witnesses today for joining us to discuss these important issues. Your testimony will help inform our work as we move this legislation forward. I look forward to a productive discussion about how we can ensure every American, regardless of their politics, their faith, or their profession, has fair access to banking services they need to participate in our economy. At this point, I'll turn to Ranking Member Cortez Mesto. Thank you, Mr. Chairman. Thank you for convening this hearing today. I bet you at one point in time had a couple of leisure suits that you owned. I did. I really liked the blue tuxedo. I bet. Thank you. I want to thank the witnesses as well. Thank you for being here. Look forward to the conversation.
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