Lafayette Reporter

Senator John Kennedy, a member of the Senate Banking Committee, has joined forces with Senator Tim Scott and other Republican colleagues to introduce the Financial Integrity and Regulation Management (FIRM) Act. The proposed legislation aims to address issues related to debanking by federal regulators. According to the bill's proponents, it seeks to eliminate the use of reputational risk as a factor in supervising financial institutions.

Senator Kennedy expressed concern over what he described as discrimination by financial regulators against customers based on political disagreements. "I’m proud to help introduce the FIRM Act to protect law-abiding Americans from rogue regulators with a biased agenda," he stated.

Senator Scott, who chairs the Senate Banking Committee, emphasized his commitment to tackling debanking practices. He noted that "federal regulators have abused reputational risk by carrying out a political agenda against federally legal businesses." Scott believes that removing references to reputational risk in regulatory supervision is essential for ending debanking practices.

Reputational risk involves negative public opinion regarding financial institutions and can influence federal banking agencies like the Office of the Comptroller of the Currency and others when deciding whether institutions should provide services to certain industries.

The FIRM Act proposes several measures, including eliminating references to reputational risk in assessing depository institutions' safety and soundness. It also seeks to prevent federal banking agencies from introducing new rules based on reputational risk and requires them to report their progress on this issue to Congress.

The bill is co-sponsored by Senators Mike Crapo, Mike Rounds, Thom Tillis, Bill Hagerty, Cynthia Lummis, Katie Britt, Pete Ricketts, Jim Banks, Kevin Cramer, Bernie Moreno, and Dave McCormick.