SENATOR SCOTT APPLAUDS PRESIDENT TRUMP'S EXECUTIVE ORDER TO COMBAT DEBANKING

The following information was released by South Carolina Senator Tim Scott:

Senate Banking Committee Chairman Tim Scott (R-S.C.) issued the following statement on President Trump's Executive Order to combat debanking.

"Debanking federally legal businesses and law-abiding citizens is un-American, and President Trump's Executive Order (E.O.) is a critical step towards protecting Americans' access to financial services. Here in Congress, I've led my colleagues in fighting back against debanking, including passing legislation to end the subjective use of 'reputational risk' in bank supervision. I am glad to see today's E.O. which will ensure that no regulator, and no bank, is above the principles of fairness and market access. I'll continue to work with President Trump to end the debanking of law-abiding Americans and federally legal businesses on the basis of their political or religious affiliations,"said Senator Tim Scott.

BACKGROUND:

In his firstlegislative hearingof the year, Senator Scott hosted witnesses who shared firsthand their experiences being debanked. At the hearing, Senator Scott called out the Biden administration's financial regulators who exploited their power and pressured financial institutions to cut off services to individuals and businesses and pledged that the committee will work to find solutions to address this issue. During the committee's hearing with Federal Reserve Chair Jerome Powell, Senator Scott againhighlightedthe issue of debanking federally legal businesses and law-abiding citizens, and Chair Powellcommittedto working with the committee to end this practice. Senator Scott alsoleda roundtable discussion with Senate Banking Republicans and leaders from the nation's largest consumer banks focused on debanking and other regulatory issues facing the financial institutions.

At each of these events, Senator Scott heard testimony on how federal banking regulators use a subjective concept called "reputational risk" to regulate banks based on the subjective view of negative publicity, which provides cover for the agencies to implement their own political agenda unrelated to the safety and soundness of a bank.

As a result, Senator Scottledhis fellow Banking Committee Republicans in introducing legislation to curtail the weaponization of federal banking agencies by eliminating the ability for regulators to use reputational risk as a component of supervision. The American Bankers Association, the Bank Policy Institute, the Financial Services Forum, the Blockchain Association, and the Online Lenders Alliance have allendorsedthe bill. Organizations representing industries that have been debanked, including the ATM Industry Association, the INFiN Alliance, the National Pawnbrokers Association, and the National Shooting Sports Foundation, as well as a coalition of 26 state financial officers, alsovoicedtheir support. Rep. Andy Barr (R-Ky.)introducedbipartisan companion legislation in the House of Representatives.

Senator Scott'sFinancial Integrity and Regulation Management (FIRM) Act advancedout of the Senate Banking Committee during the first legislative markup of the 119th Congress. After the committee successfullypassedthe bill, federal financial regulatorstook actionto remove this arbitrary regulatory tool.