Renewed Efforts for Fair Access to Banking Loom as Trump Presidency Approaches

As Trump eyes a second term, renewed efforts for federal fair banking access gain momentum, amid state-level laws and congressional proposals focused on inclusivity.

As we approach what could be a second Trump administration, the prospect of a renewed push for federal-level fair access to banking regulations is becoming more likely.

The previous Trump administration was on the verge of solidifying these measures towards the end of its term, but the Biden administration quickly put a stop to them upon taking office.

Financial institutions should keep a close eye out for new initiatives from both Congress and a potential Trump administration in the coming year.

Past Initiatives Under Trump

In January 2021, the Office of the Comptroller of the Currency (OCC) unveiled a significant regulation aimed at preventing financial institutions from denying services based on a customer’s political or social beliefs.

This rule, named “Fair Access to Financial Services,” required covered banks—those with assets over $100 billion under OCC oversight—to provide financial services to everyone in their service area without discrimination.

The only basis for denying services could be established, objective risk assessments.

The OCC notably addressed sectors like abortion providers and private prisons, which had faced service denials amidst public controversy.

However, following the Biden administration’s transition, the rollout of this regulation was halted, and it has yet to be revisited by the OCC.

Currently, President-elect Trump has not announced plans for selecting a new Comptroller of the Currency—an essential role that will need Senate approval.

The individual in this position will play a crucial part in determining whether the fair access rule will be revived.

State-Level Actions During Biden’s Tenure

In light of the halted fair access rule, state legislatures have stepped up to introduce their own fair access banking laws.

Earlier this year, Florida passed a law that prohibits both state and federal banks from refusing services based on a customer’s religious or political beliefs.

Similarly, Tennessee’s House Bill 2100 includes provisions that protect against service denial for reasons related to political or social views.

Other states, such as Arizona, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, and South Dakota, also proposed legislation this year to promote fair access to banking, although these efforts largely fell flat.

The OCC has expressed concerns about the potential for state laws to create inefficiencies for national banks and federal savings associations.

Still, there has been no decisive OCC intervention to override or invalidate these state measures, leaving them in place.

Federal Congressional Movements

During the Biden administration, various attempts have been made in Congress to implement a legislative framework that would establish the fair access rule proposed by the OCC.

While significant support from Republican lawmakers surfaced for the “Fair Access to Banking Act” presented in both 2021 and 2023, the bill failed to progress to voting in either chamber of Congress.

Discussions surrounding fair access to banking have gained traction in mainstream media, with platforms like the Joe Rogan Experience bringing attention to the issue.

With Republicans regaining control of both congressional chambers and the presidency, the chances of a fair access bill passing at the federal level are likely to increase in the upcoming year.

Financial institutions should brace themselves for renewed efforts focused on fair access to banking from a Republican-led government and Congress.

Additionally, we can expect to see ongoing legislative initiatives at the state level.

Stakeholders ought to remain vigilant as new regulations and discussions regarding this critical topic are likely on the horizon.

Source: Natlawreview