Access to Banking for Customers

Summary#

This bill, the Fair Access to Banking Act, would limit when large banks, payment card networks, and credit unions can refuse to provide services to lawful businesses or customers. Its main change is to bar certain large financial firms from using federal services (like the Fed’s discount window, the Automated Clearing House, or payment card networks) if they refuse to do business with people who are complying with the law. The bill also creates a private right to sue banks that deny lawful customers and requires banks to use and document impartial, risk-based standards.

• Main change: Banks and similar firms that meet the bill’s thresholds could lose access to federal services or face penalties if they refuse to serve lawful customers for reasons like political or reputational concerns.
• Who is targeted: The bill focuses on very large banks (a $50 billion asset threshold is used in several places; one provision uses $500 billion), covered credit unions, and major payment networks.
• Enforcement tools: Regulators could block use of certain federal programs, assess civil penalties against card networks, and individuals may sue banks for damages (including treble damages and attorney fees).
• Operational rules: Covered banks must make services available on proportionally equal terms in their markets, deny services only for documented, quantitative, impartial risk reasons, and give written justification when they deny service.
• What is unclear: The bill does not fully explain how regulators will judge an institution’s risk standards, how they will measure “proportionally equal terms,” or how the rules will interact with banks’ legal obligations (for example, anti-money-laundering or sanctions compliance).

What it means for you#

• Large banks and their subsidiaries (generally ≥ $50 billion in assets):

  • They could be barred from using the Federal Reserve’s discount window (short-term Fed lending) or the Automated Clearing House (ACH) if they refuse to serve lawful customers.
  • They are presumed to be “covered banks” (subject to the law) but may try to rebut that presumption with documents to the Comptroller of the Currency.
  • When denying service, they must use pre-set, quantitative risk standards and provide written explanations to the customer.

• Very large insured banks (≥ $500 billion in assets):

  • The bill adds these banks to a list of institutions subject to related supervisory provisions (by amending an existing law). This makes them explicitly covered by the refusal-to-serve rules in at least one place in federal banking law.

• Credit unions:

  • Insured credit unions and some other credit unions are covered. They face the same rules about refusing to do business with lawful customers and could lose access to the ACH network if they refuse service.

• Payment card networks (e.g., card processors and networks):

  • They may not block or inhibit access to their services for lawful businesses because of political or reputational risk.
  • The Comptroller of the Currency may assess civil penalties up to 10% of the value of services involved, with a cap of $10,000 per violation.

• Businesses and customers (especially in lawful but politically sensitive industries):

  • People and firms that are lawful under federal law could have stronger legal protection against being cut off by banks or payment networks for political or reputational reasons.
  • A person or business that is denied service can sue a covered bank in federal court without first using administrative remedies. If they win, they can receive attorney fees and triple damages.

• Smaller banks and most community banks:

  • Banks with less than $50 billion in assets are not presumed to be “covered banks.” The bill mainly targets very large institutions.

Expenses#

No publicly available information.

• The bill could increase enforcement and supervision work for federal regulators (for example, the Office of the Comptroller of the Currency), but the text does not include a cost estimate.
• The private right of action with treble damages could lead to more litigation costs for banks and higher legal expenses for plaintiffs.
• Banks and credit unions may incur compliance costs to create, document, and maintain the “quantified and documented” risk standards and to prepare written denials.
• Payment card networks could face fines under the bill; the bill sets penalty limits but gives no fiscal estimate of aggregate costs.

Proponents' View#

• The bill appears intended to ensure that lawful businesses and people are not denied banking or payment services for political or reputational reasons.
• It appears intended to require banks to use impartial, quantitative risk measures rather than category-based or subjective judgments.
• The bill could be seen as protecting access to financial services for lawful but politically unpopular businesses.
• It appears intended to make large financial firms accountable because they benefit from taxpayer support and special access to federal systems.

Opponents' View#

• One concern is that the bill does not clearly explain how regulators will judge whether a bank’s risk standards are adequate. This could create uncertainty about compliance.
• The requirement to offer services on “proportionally equal terms” and the bar on decisions based on reputational risk may conflict with legitimate risk-management rules, anti-money-laundering duties, or sanctions compliance; the bill says exceptions are allowed “as necessary to comply with another provision of law,” but it does not detail how conflicts will be resolved.
• Creating a broad private right to sue with treble damages and attorney fees may encourage litigation and raise legal costs for banks and courts.
• Definitions such as “covered bank,” “proportionally equal terms,” and what counts as “reputational risk” are vague and may be hard to apply in practice.
• The bill could force banks to maintain relationships with higher-risk customers even when banks judge the business as presenting unacceptable nonfinancial risks, which may affect banks’ ability to manage overall risk.