Tim Scott introduces Senate bill to address debanking over 'reputational risk'
Published On Mar 7, 2025, 1:18 PM
Senator Tim Scott has introduced the Financial Integrity and Regulation Management (FIRM) Act to tackle issues of "debanking," where banks terminate accounts over reputational risk concerns related to certain industries. The legislation aims to remove references to reputational risk from financial regulation, which Scott argues has been misused to push a political agenda against legitimate businesses. Although Scott's bill is currently supported only by Republican senators, addressing debanking is seen as a bipartisan issue. The bill comes at a time where regulations on sectors like crypto, cannabis, and firearms have contributed to industry uncertainties.
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If passed, the FIRM Act could increase the operational predictability for businesses in sectors previously impacted by reputational debanking, potentially encouraging investors into financial institutions and associated industries. However, legislative uncertainty remains, which could delay any significant changes.
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