Fair Access to Banking Act
The Fair Access to Banking Act would require banks, credit unions, and payment networks to provide fair, evidence-based access to financial services and to avoid denying such services based on political or reputational considerations. It ties access to taxpayer-supported facilities (like Fed discount window lending) by prohibiting large banks and other covered institutions from using those facilities if they refuse to do business with anyone who is in compliance with the Act. It also creates standards for how institutions must evaluate risk, insist on written explanations for denials, and allows individuals to sue covered banks for violations, with damages and attorney’s fees. The bill also extends these fair-access requirements to payment card networks and automated clearinghouse (ACH) networks, and it includes specific asset-based definitions and presumptions to determine which institutions are covered. In short, the bill seeks to curb subjective, category-based refusals of financial services and to enforce non-discriminatory, risk-based decision making across banks, credit unions, and related payment networks, while imposing penalties and potential loss of Fed support for institutions that do not comply.
Key Points
- 1Prohibition tied to discount window access: Large banks (and some affiliates) with over $50B in total assets may not use Fed discount window lending if they refuse to do business with any person in compliance with the Act, including Section 8 requirements.
- 2Expanded scope to other institutions: The Act amends FDIC, Federal Reserve, and Federal Credit Union provisions to prohibit refusals to do business with compliant customers by insured depository institutions, nonmember banks, trust companies, and covered credit unions above specified asset thresholds.
- 3Fair access requirements: Covered banks must offer each financial service in their geographic market on proportionally equal terms, justify denials with quantitative risk-based standards, avoid coordinating with others to deny services, and provide written explanations for denials. Denials must be based on impartial risk criteria, not reputational risk alone.
- 4Civil remedies and penalties: A person harmed by a violation may sue in federal court for damages, attorney’s fees, and treble damages. Payment card networks face civil penalties (up to 10% of the value of the services, not to exceed $10,000 per violation) for obstructing compliant customers.
- 5Coverage of payment networks and ACH: The act prohibits payment card networks and ACH participants from restricting access based on political or reputational risk and imposes penalties for violations.
- 6Definitions and standards: The Act defines “fair access to financial services,” “covered bank,” “denial,” and related terms, and sets asset-based presumptions (e.g., presumption of being a covered bank at $50B+ in assets unless rebutted).