H.R. 987 — Fair Access to Banking Act

This section states congressional findings regarding Operation Choke Point (i.e., a prior initiative in which government agencies pressured financial institutions to deny services to certain lawful industries) and the risks posed when financial institutions engage in similar category-based denials of financial services due to subjective, non-financial factors. (Thus, the findings emphasize that taxpayer-supported institutions must provide fair access based on quantitative, impartial, case-by-case risk assessments rather than political biases or prejudices.)

This section establishes the purposes of the Act as (1) ensuring fair access to financial services and fair treatment of customers by financial service providers, including national and State banks, Federal savings associations, and State and Federal credit unions; (2) ensuring financial institutions operate in a safe and sound manner, comply with laws and regulations, treat customers fairly, and provide fair access to financial services; (3) protecting against financial institutions impeding otherwise lawful commerce to achieve public policy goals; (4) ensuring persons involved in politically unpopular but federally lawful businesses receive fair access to financial services; and (5) requiring financial institutions to make service decisions via impartial, individualized, risk-based analysis using empirical data and quantifiable standards.

This section restricts access to Federal Reserve lending programs and FDIC insurance for large depository institutions and their subsidiaries that refuse to do business with persons in compliance with the law, including section 8 of the Fair Access to Banking Act, by— (1) prohibiting member banks with more than $50 billion in total consolidated assets from using discount window lending programs under section 10B of the Federal Reserve Act; (2) adding as a ground for involuntary termination of deposit insurance any insured depository institution with more than $500 billion in total consolidated assets under section 8(a)(2)(A)(iv) of the Federal Deposit Insurance Act; and (3) prohibiting nonmember banks, trust companies, and other depository institutions with more than $50 billion in total consolidated assets from refusing to do business under section 13 of the Federal Reserve Act.

This section prohibits payment card networks (i.e., as defined in section 921(c) of the Electronic Fund Transfer Act, 15 U.S.C. 1693o–2(c)) from restricting any compliant person's (including compliance with section 8 of this Act) access to network services or products based on political or reputational risk considerations. It authorizes the Comptroller of the Currency to assess a civil penalty against violating networks of up to 10% of the value of restricted services or products, not to exceed $10,000 per violation.

This section adds as a condition requiring the National Credit Union Administration (NCUA) Board to serve a notice to correct on an insured credit union—or to send a copy to the relevant state supervisor, if state-chartered—a refusal, or a subsidiary's refusal, to do business with any person in compliance with the law, including section 8 of the Fair Access to Banking Act. (Thus, failure to correct such refusal within 120 days, or a shorter period of not less than 20 days if required by the NCUA Board, may lead to proceedings to terminate the credit union's federal share insurance.)

This section prohibits covered credit unions (i.e., insured credit unions or those eligible for federal insurance), Federal Reserve member banks, and state-chartered non-member banks with more than $50 billion in total consolidated assets—or any subsidiary thereof—from using the Automated Clearing House (ACH) network if such entities refuse to do business with any person in compliance with the law, including section 8 of this Act. (The ACH network processes electronic funds transfers such as direct deposits and bill payments.)

This section defines terms—including "covered bank" (generally banks with $50 billion or more in total assets, subject to rebuttable presumption), "covered credit union" (any insured credit union or one eligible for insurance), and "financial service" (e.g., lending, payment processing)—and requires covered banks (including subsidiaries and covered credit unions) to (1) offer available financial services on proportionally equal terms within their geographic market; (2) deny services only based on the person's quantified failure to meet the bank's pre-established, impartial risk standards; (3) refrain from denying services in coordination with others; and (4) provide written denial justifications (not based solely on reputational risk), except as needed to comply with other laws. It further authorizes any harmed person to bring a federal civil action against a violating covered bank without exhausting administrative remedies and requires courts to award prevailing plaintiffs treble damages and reasonable attorney's fees and costs.