Bill > HR2702

This bill, known as the Financial Integrity and Regulation Management (FIRM) Act, aims to prohibit federal banking agencies from using "reputational risk" as a factor in supervising depository institutions like banks and credit unions. The bill defines reputational risk as potential negative publicity that could impact an institution's reputation, and argues that this concept has been misused to politically discriminate against legally operating businesses. Specifically, the bill requires federal banking agencies to remove all references to reputational risk from their guidance, examination manuals, and other supervisory documents, and strictly prohibits these agencies from considering reputational risk when examining or supervising financial institutions. The legislation stems from concerns about past practices like "Operation Choke Point" in 2018, where the Federal Deposit Insurance Corporation was alleged to have limited financial services to certain industries based on subjective negative perceptions. The bill mandates that within 180 days of enactment, each federal banking agency must submit a report to Congressional committees confirming their implementation of these requirements and detailing any internal policy changes. The underlying goal is to ensure that all legally operating businesses have equal access to financial services, free from potential political bias or subjective judgments about their reputation.

Business and Industry

https://www.congress.gov/bill/119th-congress/house-bill/2702/all-info