Tim Scott introduces Senate bill to address debanking over 'reputational risk'

OG Article

Eric Revell

03-07-2025

The bill is cosponsored by a dozen Republican senators who are members of the Senate Banking Committee and was introduced after the panel held a hearing on debanking in early February.

Federal laws and financial regulations on the books require institutions in the banking industry to close accounts over concerns about issues like money laundering or illicit financial activities, while reputational risk is also considered in those decisions. 

BIG BANK CEOS TO MEET WITH LAWMAKERS ON SOLUTIONS TO DEBANKING

JPMorgan Chase CEO Jamie Dimon recently called for banks to have more clarity around debanking regulations. ( Kent Nishimura/Bloomberg via Getty Images / Getty Images)

Uncertainty surrounding emerging industries that have unclear regulatory frameworks, such as digital assets like crypto or cannabis businesses in states with legal marijuana, has contributed to debanking. Concern over reputational risk or other regulatory considerations have also led to firearm makers and dealers being debanked.

Scott said at the hearing that he is "committed to a bipartisan solution to stop this form of discrimination." Though his bill only has GOP support at this time, any debanking legislation will require bipartisan support to overcome the Senate's 60-vote threshold for the legislative filibuster.

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Scott also hosted a roundtable last month to discuss debanking issues with the leaders of large U.S. banks, including JPMorgan Chase CEO Jamie Dimon, Bank of America CEO Brian Moynihan, Capital One CEO Richard Fairbank, Wells Fargo CEO Charles Scharf, U.S. Bank CEO Andrew Cecere, PNC CEO Bill Demchak and Truist CEO Bill Rogers.