Fair Access to Banking Act
Bill: S.563 | Sponsor: Sen. Cramer, Kevin (R-ND)
Policy area: Finance and Financial Sector

Summary:
Fair Access to Banking Act
This bill restricts certain banks, credit unions, and payment card networks from refusing to do business with a person who is in compliance with the law. Restrictions include prohibiting the use of certain lending programs, initiating the process of terminating an institution's depository insurance, and instituting specified civil penalties.

To amend the Federal Reserve Act to prohibit certain financial service 
    providers who deny fair access to financial services from using 
    taxpayer funded discount window lending programs, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Fair Access to Banking Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) article I of the Constitution of the United States 
        guarantees the people of the United States the right to enact 
        public policy through the free and fair election of 
        representatives and through the actions of State legislatures 
        and Congress;
            (2) banks rightly objected to the Operation Choke Point 
        initiative through which certain government agencies pressured 
        banks to cut off access to financial services to lawful sectors 
        of the economy;
            (3) banks are now, however, increasingly employing 
        subjective, category-based evaluations to deny certain persons 
        access to financial services in response to pressure from 
        advocates from across the political spectrum whose policy 
        objectives are served when banks deny certain customers access 
        to financial services;
            (4) the privatization of the discriminatory practices 
        underlying Operation Choke Point by banks represents as great a 
        threat to the national economy, national security, and the 
        soundness of banking and financial markets in the United States 
        as Operation Choke Point itself;
            (5) banks are supported by the United States taxpayers and 
        enjoy significant privileges in the financial system of the 
        United States and should not be permitted to act as de facto 
        regulators or unelected legislators by withholding financial 
        services to otherwise credit worthy businesses based on 
        subjective political reasons, bias or prejudices;
            (6) banks are not well-equipped to balance risks unrelated 
        to financial exposures and the operations required to deliver 
        financial services;
            (7) the United States taxpayers came to the aid for large 
        banks during the great recession of 2008 because they were 
        deemed too important to the national economy to be permitted to 
        fail;
            (8) when a bank predicates the access to financial services 
        of a person on factors or information (such as the lawful 
        products a customer manufactures or sells or the services the 
        customer provides) other than quantitative, impartial risk-
        based standards, the bank has failed to act consistent with 
        basic principles of sound risk management and failed to provide 
        fair access to financial services;
            (9) banks have a responsibility to make decisions about 
        whether to provide a person with financial services on the 
        basis of impartial criteria free from prejudice or favoritism;
            (10) while fair access to financial services does not 
        obligate a bank to offer any particular financial service to 
        the public, or to operate in any particular geographic area, or 
        to provide a service the bank offers to any particular person, 
        it is necessary that--
                    (A) the financial services a bank chooses to offer 
                in the geographic areas in which the bank operates be 
                made available to all customers based on the 
                quantitative, impartial risk-based standards of the 
                bank, and not based on whether the customer is in a 
                particular category of customers;
                    (B) banks assess the risks posed by individual 
                customers on a case-by-case basis, rather than 
                category-based assessment; and
                    (C) banks implement controls to manage 
                relationships commensurate with these risks associated 
                with each customer, not a strategy of total avoidance 
                of particular industries or categories of customers;
            (11) banks are free to provide or deny financial services 
        to any individual customer, but first, the banks must rely on 
        empirical data that are evaluated consistent with the 
        established, impartial risk-management standards of the bank; 
        and
            (12) anything less is not prudent risk management and may 
        result in unsafe or unsound practices, denial of fair access to 
        financial services, cancelling, or eliminating certain 
        businesses in society, and have a deleterious effect on 
        national security and the national economy.

SEC. 3. PURPOSE.

    The purposes of this Act are to--
            (1) ensure fair access to financial services and fair 
        treatment of customers by financial service providers, 
        including national and state banks, Federal savings 
        associations and State and Federal credit unions;
            (2) ensure banks conduct themselves in a safe and sound 
        manner, comply with laws and regulations, treat their customers 
        fairly, and provide fair access to financial services;
            (3) protect against banks being able to impede otherwise 
        lawful commerce and thereby achieve certain public policy 
        goals;
            (4) ensure that persons involved in politically unpopular 
        businesses but that are lawful under Federal law receive fair 
        access to financial services under the law; and
            (5) ensure banks operate in a safe and sound manner by 
        making judgments and decisions about whether to provide a 
        customer with financial services on an impartial, 
        individualized risk-based analysis using empirical data 
        evaluated under quantifiable standards.

SEC. 4. ADVANCES TO INDIVIDUAL MEMBER BANKS.

    (a) Member Banks.--Section 10B of the Federal Reserve Act (12 
U.S.C. 347b) is amended by adding at the end the following:
    ``(c) Prohibition on Use of Discount Window Lending Programs.--No 
member bank with more than $10,000,000,000 in total consolidated 
assets, or subsidiary of the member bank, may use a discount window 
lending program if the member bank or subsidiary refuses to do business 
with any person who is in compliance with the law, including section 8 
of the Fair Access to Banking Act.''.
    (b) Insured Depository Institutions.--Section 8(a)(2)(A) of the 
Federal Deposit Insurance Act (12 U.S.C. 1818(a)(2)(A)) is amended--
            (1) in clause (ii), by striking ``or'' at the end;
            (2) in clause (iii), by striking the comma at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                            ``(iv) an insured depository institution 
                        with more than $10,000,000,000 in total 
                        consolidated assets, or subsidiary of the 
                        insured depository institution, that refuses to 
                        do business with any person who is in 
                        compliance with the law, including section 8 of 
                        the Fair Access to Banking Act.''.
    (c) Nonmember Banks, Trust Companies, and Other Depository 
Institutions.--Section 13 of the Federal Reserve Act (12 U.S.C. 342) is 
amended by inserting ``Provided further, That no such nonmember bank or 
trust company or other depository institution with more than 
$10,000,000,000 in total consolidated assets, or subsidiary of such 
nonmember bank or trust company or other depository institution, may 
refuse to do business with any person who is in compliance with the 
law, including , including section 8 of the Fair Access to Banking 
Act:'' after ``appropriate:''.

SEC. 5. PAYMENT CARD NETWORK.

    (a) Definition.--In this section, the term ``payment card network'' 
has the meaning given the term in section 921(c) of the Electronic Fund 
Transfer Act (15 U.S.C. 1693o-2(c)).
    (b) Prohibition.--No payment card network, including a subsidiary 
of a payment card network, may, directly or through any agent, 
processor, or licensed member of the network, by contract, requirement, 
condition, penalty, or otherwise, prohibit or inhibit the ability of 
any person who is in compliance with the law, including section 8 of 
this Act, to obtain access to services or products of the payment card 
network because of political or reputational risk considerations.
    (c) Civil Penalty.--Any payment card network that violates 
subsection (b) shall be assessed a civil penalty by the Comptroller of 
the Currency of not more than 10 percent of the value of the services 
or products described in that subsection, not to exceed $10,000 per 
violation.

SEC. 6. CREDIT UNIONS.

    Section 206(b)(1) of the Federal Credit Union Act (12 U.S.C. 1786) 
is amended by inserting ``or is refusing or has refused, or has a 
subsidiary that is refusing or has refused, to do business with any 
person who is in compliance with the law, including section 8 of the 
Fair Access to Banking Act,'' after ``as an insured credit union,''.

SEC. 7. USE OF AUTOMATED CLEARING HOUSE NETWORK.

    (a) Definitions.--In this section:
            (1) Covered credit union.--The term ``covered credit 
        union'' means--
                    (A) any insured credit union, as defined in section 
                101 of the Federal Credit Union Act (12 U.S.C. 1752); 
                or
                    (B) any credit union that is eligible to make 
                application to become an insured credit union under 
                section 201 of the Federal Credit Union Act (12 U.S.C. 
                1781).
            (2) Member bank.--The term ``member bank'' has the meaning 
        given the term in the third undesignated paragraph of the first 
        section of the Federal Reserve Act (12 U.S.C. 221).
    (b) Prohibition.--No covered credit union, member bank, or State-
chartered non-member bank with more than $10,000,000,000 in total 
consolidated assets, or a subsidiary of the covered credit union, 
member bank, or State-chartered non-member bank, may use the Automated 
Clearing House Network if that member bank, credit union, or subsidiary 
of the member bank or credit union, refuses to do business with any 
person who is in compliance with the law, including section 8 of this 
Act.

SEC. 8. FAIR ACCESS TO FINANCIAL SERVICES.

    (a) Definitions.--In this section:
            (1) Bank.--The term ``bank''--
                    (A) means an entity for which the Office of the 
                Comptroller of the Currency is the appropriate Federal 
                banking agency, as defined in section 3 of the Federal 
                Deposit Insurance Act (12 U.S.C. 1813); and
                    (B) includes--
                            (i) member banks;
                            (ii) non-member banks;
                            (iii) covered credit unions;
                            (iv) State-chartered non-member banks; and
                            (v) trust companies.
            (2) Covered bank.--
                    (A) In general.--The term ``covered bank'' means a 
                bank that has the ability to--
                            (i) raise the price a person has to pay to 
                        obtain an offered financial service from the 
                        bank or from a competitor; or
                            (ii) significantly impede a person, or the 
                        business activities of a person, in favor of or 
                        to the advantage of another person.
                    (B) Presumption.--
                            (i) In general.--A bank shall not be 
                        presumed to be a covered bank if the bank has 
                        less than $10,000,000,000 in total assets.
                            (ii) Rebuttable presumption.--
                                    (I) In general.--A bank is presumed 
                                to be a covered bank if the bank has 
                                $10,000,000,000 or more in total 
                                assets.
                                    (II) Rebuttal.--A bank that meets 
                                the criteria under subclause (I) can 
                                seek to rebut this presumption by 
                                submitting to the Office of the 
                                Comptroller of the Currency written 
                                materials that, in the judgement of the 
                                agency, demonstrate the bank does not 
                                meet the definition of covered bank.
            (3) Covered credit union.--The term ``covered credit 
        union'' means--
                    (A) any insured credit union, as defined in section 
                101 of the Federal Credit Union Act (12 U.S.C. 1752); 
                or
                    (B) any credit union that is eligible to make 
                application to become an insured credit union under 
                section 201 of the Federal Credit Union Act (12 U.S.C. 
                1781).
            (4) Deny.--The term ``deny'' means to deny or refuse to 
        enter into or terminate an existing financial services 
        relationship with a person.
            (5) Fair access to financial services.--The term ``fair 
        access to financial services'' means persons engaged in 
        activities lawful under Federal law are able to obtain 
        financial services at banks without impediments caused by a 
        prejudice against or dislike for a person or the business of 
        the customer, products or services sold by the person, or 
        favoritism for market alternatives to the business of the 
        person.
            (6) Financial service.--The term ``financial service'' 
        means a financial product or service, including--
                    (A) commercial and merchant banking;
                    (B) lending;
                    (C) financing;
                    (D) leasing;
                    (E) cash, asset and investment management and 
                advisory services;
                    (F) credit card services;
                    (G) payment processing;
                    (H) security and foreign exchange trading and 
                brokerage services; and
                    (I) insurance products.
            (7) Member bank.--The term ``member bank'' has the meaning 
        given the term in the third undesignated paragraph of the first 
        section of the Federal Reserve Act (12 U.S.C. 221).
            (8) Person.--The term ``person''--
                    (A) means--
                            (i) any natural person; or
                            (ii) any partnership, corporation, or other 
                        business or legal entity; and
                    (B) includes a customer.
    (b) Requirements.--
            (1) In general.--To provide fair access to financial 
        services, a covered bank, including a subsidiary of a covered 
        bank, shall, except as necessary to comply with another 
        provision of law--
                    (A) make each financial service it offers available 
                to all persons in the geographic market served by the 
                covered bank on proportionally equal terms;
                    (B) not deny any person a financial service the 
                covered bank offers unless the denial is justified by 
                such quantified and documented failure of the person to 
                meet quantitative, impartial risk-based standards 
                established in advance by the covered bank;
                    (C) not deny, in coordination with or at the 
                request of others, any person a financial service the 
                covered bank offers; and
                    (D) when denying any person financial services the 
                covered bank offers, to provide written justification 
                to the person explaining the basis for the denial, 
                including any specific laws or regulations the covered 
                bank believes are being violated by the person or 
                customer, if any.
            (2) Justification requirement.--A justification described 
        in paragraph (1)(D) may not be based solely on the reputational 
        risk to the depository institution.
    (c) Cause of Action for Violations of This Section.--
            (1) In general.--Notwithstanding any other provision of 
        law, a person may commence a civil action in the appropriate 
        district court of the United States against any covered bank or 
        covered credit union that violates or fails to comply with the 
        requirements under this Act, for harm that person suffered as a 
        result of such violation.
            (2) No exhaustion.--It shall not be necessary for a person 
        to exhaust its administrative remedies before commencing a 
        civil action under this Act.
            (3) Damages.--If a person prevails in a civil action under 
        this Act, a court shall award the person--
                    (A) reasonable attorney's fees and costs; and
                    (B) treble damages.
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