AFFM Applauds U.S. House Passage of the FIRM Act as Part of the Main Street Capital Access Act

Yesterday, the U.S. House passed the Financial Integrity and Regulation Management (FIRM) Act as part of the Main Street Capital Access Act. The FIRM Act is a positive step in ensuring fair access to banking for all Americans by halting federal regulators from engaging in politically motivated debanking. By codifying this reform, the legislation will help prevent the return of government-driven debanking under future administrations. The bill now advances to the U.S. Senate. 

The legislation prohibits federal banking regulators from considering “reputation risk,” the vague and subjective supervisory standard that enabled regulators to pressure banking institutions into closing the accounts of individuals or groups disfavored for political, ideological or religious reasons.

AFFM Advisor and Former U.S. Senator Pat Toomey (R–PA): “We commend the House for working to ensure banking supervision remains focused on what it was always intended to address: the safety and soundness of financial institutions. For years under the Obama and Biden administrations, regulators used the vague and subjective concept of ‘reputation risk’ to pressure banks into cutting off lawful customers without clear statutory authority or transparent standards. The FIRM Act ends that practice by making clear that supervisory decisions must be grounded in objective financial risk, not subjective policy preferences.”

AFFM Advisor and Former U.S. House Ways and Means Committee Chairman Kevin Brady (R–TX): “America’s economy is strongest when businesses can focus on investing, hiring and serving their customers instead of navigating vague and politicized regulatory standards.  The FIRM Act promotes a competitive financial system by giving regulators and financial institutions clear expectations while preserving reliable access to banking services for lawful businesses. That certainty encourages investment, supports economic growth and allows our financial system to better serve the needs of American businesses and consumers.”AFFM Executive Director David Ibsen: “The FIRM Act is necessary to ensure that the government-driven debanking practices seen under the Obama and Biden administrations cannot return under future administrations. Politicized regulators overreached by using ‘reputation risk’ to influence which lawful customers and industries banks could serve. This legislation will end the misuse of reputational risk to ensure fair access regardless of which party is in power.AFFM urges the Senate, including Senator Tim Scott, who originally introduced the FIRM Act, to continue this momentum by swiftly passing this bill through the Senate so the President can fulfill Executive Order 14331 and guarantee fair banking for all Americans.”