FIRM Act
Banking: Removing Reputational Risk from Federal Oversight
The FIRM Act has been approved by the House Financial Services Committee and is now waiting for further action on the House floor. It is currently moving forward through the legislative process. There are no other scheduled actions at this time.
Legislative Progress
The bill has bipartisan support and has already moved out of committee, but it may face challenges in a divided Senate where banking regulations are often a point of heavy debate.
Key Points
- The FIRM Act stops federal agencies like the FDIC and the CFPB from using a bank's reputation as a reason to punish them. Currently, regulators can flag a bank for reputational risk if they believe the bank's customers or business choices might cause negative public opinion.
- Supporters of the bill argue that regulators have used reputation rules to pressure banks into dropping legal businesses they dislike, such as gun shops or energy companies. This bill aims to ensure that any law-abiding citizen or legal business can get a bank account regardless of political views.
- Under this policy, federal regulators would be forced to focus only on a bank's actual financial health and safety. They would be prohibited from using negative news or public opinion to lower a bank's official rating or take enforcement actions against them.
- The bill includes a specific exception for security. Regulators can still monitor and take action if a bank is involved in illegal transactions with known terrorist groups or countries that the government has labeled as sponsors of terrorism.
- If this bill becomes law, federal banking agencies would have 180 days to scrub their rulebooks and manuals of any mention of reputational risk. They would also have to send a report to Congress proving they made these changes.
Impact Analysis
Govbase has not yet run an impact analysis on this legislation.
Milestones
Placed on the Union Calendar, Calendar No. 131.
The bill is now on the schedule for the full chamber to consider. It's in line for debate and a vote.
Reported (Amended) by the Committee on Financial Services. H. Rept. 119-164.
Ordered to be Reported (Amended) by the Yeas and Nays: 33 - 19.
The committee approved this bill and is sending it to the full chamber for a vote. This is a significant step — most bills never get this far.
Committee Consideration and Mark-up Session Held
Referred to the House Committee on Financial Services.
Votes
No votes have been recorded for this legislation yet.
News
No related news coverage found for this legislation yet.
Source Information
Document Type
Congressional Bill
Official Title
FIRM Act
Data Sources
Sponsor
Cosponsors
(19)Analysis generated by AI. Always verify with official sources.