FIRM Act
Senate Committee Advances FIRM Act to Ban "Reputational Risk" from Bank Exams
Stalled
No legislative action in over 90 days.
Legislative Progress
Key Points
- Congress would ban federal bank regulators from using “reputational risk” (fear of bad press) when supervising banks and credit unions.
- Regulators would have to delete “reputational risk” from their guidance, exam manuals, and similar documents, and stop using it in ratings or enforcement actions.
- The bill would require regulators to tailor new rules to different types of banks based on their risk and business model, and explain that tailoring in proposed and final rules.
- It also orders a review of certain past regulations and gives agencies up to 3 years after the law takes effect to revise rules they decide need tailoring.
- Community banks that qualify for a simpler capital measure would get reduced reporting for the first and third quarterly reports each year, and regulators must report progress to Congress.
Impact Analysis
Personal Impact
How this policy affects specific groups of people
Milestones
Placed on Senate Legislative Calendar under General Orders. Calendar No. 32.
The bill is now on the schedule for the full chamber to consider. It's in line for debate and a vote.
Committee on Banking, Housing, and Urban Affairs. Reported by Senator Scott SC, under authority of the order of the Senate of 03/14/2025 with an amendment in the nature of a substitute. Without written report.
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 on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
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.
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Sent to a congressional committee for expert review. The committee decides whether this bill moves forward.
Introduced in Senate
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
3 articles
House committee advances bank supervisory measures
The House Financial Services Committee passed H.R. 2702, the FIRM Act, which would eliminate reputational risk from consideration in supervisory examinations. The measure passed 33-19 as part of a package aimed at limiting regulators' ability to make subjective determinations.
Federal Reserve moves to codify removal of 'reputational risk' from bank supervision
The Federal Reserve proposed officially striking 'reputational risk' from bank supervision, formalizing a shift away from the metric. The move aligns with the FIRM Act's goals to prevent 'debanking' based on political or religious beliefs or industry affiliations.
Trump alleges banks have discriminated against him
President Trump's claims of being 'debanked' have catalyzed support for the FIRM Act. The legislation, alongside a new executive order, aims to punish the banking industry for allegedly discriminating against customers for political reasons by removing 'reputational risk' as a legal justification.
Source Information
Document Type
Congressional Bill
Official Title
FIRM Act
Data Sources
Sponsor
Cosponsors
(12)Analysis generated by AI. Always verify with official sources.