Sen. Tillis Introduces Bill to Address Debanking – Americans for Tax Reform

Report on the Ensuring Fair Access to Banking Act and Its Alignment with Sustainable Development Goals (SDGs)

Introduction

On October 30th, 2025, Senator Tillis introduced a discussion draft of the Ensuring Fair Access to Banking Act. This legislative proposal aims to address the critical issue of debanking by reforming supervisory and bank examination processes that pressure financial institutions to sever customer relationships arbitrarily.

Understanding Debanking and Its Implications

• Definition: Debanking refers to the practice of terminating bank customers’ access to consumer financial services without clear justification or a pathway for appeal.
• Bank Secrecy Laws: These laws restrict communication between banks and customers regarding account closures, leaving customers without explanations or remedies, impacting their businesses, payrolls, and livelihoods.

Regulatory Origins of Debanking

Debanking is not a spontaneous occurrence but a consequence of regulatory pressures. Notably:

1. During the Obama administration, federal regulators, including the FDIC, implemented Operation Choke Point, targeting industries deemed reputationally harmful to banks.
2. A 2014 House Oversight Committee report revealed that the FDIC harassed financial institutions with threats of regulatory downgrades for maintaining ties with politically disfavored industries, without empirical justification.
3. The Biden administration continued similar regulatory actions, focusing on crypto firms and digital asset businesses.

Provisions of the Ensuring Fair Access to Banking Act

The bill proposes several key reforms to promote equitable banking access and align with Sustainable Development Goals, particularly SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequalities), and SDG 16 (Peace, Justice, and Strong Institutions):

• Prohibition of Reputational Risk in Supervision: The bill would statutorily prohibit the consideration of reputational risk in bank supervision and examination, addressing abuses of the CAMELS system where reputational risk has been weaponized against conservative groups and industries such as fossil fuels, firearms, and crypto.
• Updating Reporting Thresholds: The bill calls for raising the Bank Secrecy Act’s suspicious transaction reporting thresholds, which have remained at $10,000 since 1970. Adjusting for inflation, thresholds would approximate $80,000, reducing unnecessary reports on benign activities and easing burdens on law enforcement agencies.

Impact on Sustainable Development Goals (SDGs)

1. SDG 8 – Decent Work and Economic Growth: By ensuring fair access to banking services, the bill supports small businesses and entrepreneurs in maintaining payrolls and operations, fostering economic growth and employment.
2. SDG 10 – Reduced Inequalities: The legislation combats discriminatory banking practices based on political affiliation or industry, promoting inclusive financial services for all sectors of society.
3. SDG 16 – Peace, Justice, and Strong Institutions: The bill advocates for regulatory neutrality and transparency, strengthening institutional trust and justice in financial oversight.

Conclusion and Recommendations

• The Ensuring Fair Access to Banking Act represents a decisive move away from politicized debanking towards a neutral, fair regulatory environment.
• Banks inherently have incentives to protect their reputations for profit motives, making regulatory impositions on reputational risk considerations unnecessary and counterproductive.
• Congress is urged to advance Senator Tillis’ bill promptly to affirm that access to banking services should not be compromised due to political affiliations, thereby supporting sustainable economic development and social equity.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 8: Decent Work and Economic Growth
   • The article discusses how debanking affects businesses’ ability to service payrolls and livelihoods, impacting economic growth and decent work opportunities.
2. SDG 9: Industry, Innovation, and Infrastructure
   • Issues related to financial infrastructure and access to banking services, especially for emerging industries like crypto, are highlighted.
3. SDG 16: Peace, Justice, and Strong Institutions
   • The article addresses regulatory fairness, transparency, and the rule of law in banking supervision and examination processes.
4. SDG 10: Reduced Inequalities
   • Debanking practices that disproportionately affect certain political groups or industries suggest issues of inequality and discrimination.

2. Specific Targets Under Those SDGs

1. SDG 8: Decent Work and Economic Growth
   • Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, and innovation.
   • Target 8.10: Strengthen the capacity of domestic financial institutions to encourage and expand access to banking and financial services for all.
2. SDG 9: Industry, Innovation, and Infrastructure
   • Target 9.3: Increase the access of small-scale industrial and other enterprises to financial services, including affordable credit.
3. SDG 16: Peace, Justice, and Strong Institutions
   • Target 16.6: Develop effective, accountable and transparent institutions at all levels.
   • Target 16.7: Ensure responsive, inclusive, participatory and representative decision-making at all levels.
4. SDG 10: Reduced Inequalities
   • Target 10.3: Ensure equal opportunity and reduce inequalities of outcome, including by eliminating discriminatory laws, policies and practices.

3. Indicators Mentioned or Implied to Measure Progress

1. Indicators Related to Financial Access and Inclusion
   • Proportion of adults with access to a bank account or financial institution (implied by discussion on debanking and access to banking services).
   • Number or percentage of businesses denied banking services or experiencing account closures without appeal (implied by debanking practices).
2. Indicators Related to Regulatory Transparency and Fairness
   • Frequency and nature of regulatory actions or supervisory pressures leading to debanking (implied by discussion of regulatory harassment and Operation Choke Point).
   • Number of appeals or remedies available to customers affected by account closures (implied by lack of pathways to appeal).
3. Indicators Related to Reporting and Law Enforcement Efficiency
   • Percentage of Suspicious Activity Reports (SARs) leading to follow-up investigations (explicitly mentioned as 0.3% in 2023).
   • Threshold amounts for reporting suspicious transactions adjusted for inflation (implied by discussion of outdated $10,000 threshold).
4. Indicators Related to Equality and Non-Discrimination
   • Incidence of debanking based on political affiliation or industry type (implied by politicized debanking practices).

4. Table of SDGs, Targets, and Indicators

Source: atr.org