Bill > S875

This bill, known as the Financial Integrity and Regulation Management (FIRM) Act, aims to prevent federal banking agencies from using "reputational risk" as a factor in supervising financial institutions. The bill defines reputational risk as potential negative publicity that could harm an institution's reputation, and argues that this concept has been improperly used to discriminate against legally operating businesses. Specifically, the legislation prohibits federal banking agencies like the Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration, and Bureau of Consumer Financial Protection from considering reputational risk when examining or regulating depository institutions. The bill references "Operation Choke Point" from 2018, where the FDIC was accused of limiting financial services to certain industries based on subjective assessments. Under this proposed law, banking agencies would be forbidden from creating rules, conducting examinations, issuing findings, making ratings decisions, or taking enforcement actions that involve reputational risk. Within 180 days of the act's enactment, each federal banking agency would be required to submit a report to congressional committees confirming their implementation of these restrictions and detailing any internal policy changes made as a result.

Housing and Urban Affairs

https://www.congress.gov/bill/119th-congress/senate-bill/875/all-info