House legislators advocating for a bill centered on managing reputation-linked perils
The Financial Integrity and Regulation Management (FIRM) Act, a bill introduced by Reps. Andy Barr (R-KY), Ritchie Torres (D-NY), and Sen. Tim Scott (R-SC), is gaining traction in Congress. The legislation seeks to phase out the use of "reputational risk" as a subjective metric in bank supervision and replace it with objective financial criteria.
The bill responds to concerns about political bias in bank regulation and debanking practices, which have been highlighted during a February 2025 Congressional hearing. The FIRM Act aims to address regulatory abuses under initiatives like Operation Choke Point and restore the neutrality and integrity of the financial regulatory system.
As of August 2025, the bill has passed relevant House and Senate committees, with the Senate version awaiting a full Senate vote. The bill has achieved significant milestones, including bipartisan committee endorsements in both chambers, indicating a strong likelihood of advancing further in Congress.
The bill's sponsors, Reps. Barr and Torres, introduced a House version of the bill in May 2025. Sen. Scott introduced the Senate version last month. The legislation has garnered support from at least one Democratic senator, Elizabeth Warren of Massachusetts, who expressed concern about de-banking during a February hearing.
De-banking, or the practice of banks shutting off services based on perceived political risk rather than financial soundness, has been a contentious issue. President Donald Trump called out Bank of America and JPMorgan Chase for allegedly dropping conservative customers during a virtual appearance at the World Economic Forum in Davos, Switzerland. CEO Brian Moynihan of Bank of America clarified that the issue was about over-regulation, not dropping conservative customers.
The bill's supporters argue that the use of reputational risk allows regulators to apply subjective standards, which some argue have been exploited for political bias in banking decisions. The OCC has already stated it will stop examining reputational risk in its financial institutions.
Scott, the bill's main Senate sponsor, considers ending de-banking a top priority. During the Senate Banking Committee's vote to approve Jonathan Gould's nomination to lead the OCC, Scott stated that Gould would bring firsthand experience to the agency and put an end to politically motivated de-banking.
The bill's passage would mark a significant step towards ensuring financial institutions serve all credit-worthy Americans and providing open access, free from undue political interference. Warren cited analysis showing nearly 12,000 de-banking-related complaints were filed by consumers over the past three years, with more than half of those complaints made against the four biggest U.S. banks - JPMorgan Chase, Bank of America, Citi, and Wells Fargo.
In summary, the FIRM Act, with its bipartisan support and endorsements from banking industry associations and conservative policymakers, aims to eliminate "reputational risk" as a subjective supervisory factor for banks, replace it with objective financial criteria, and end the discriminatory practice of de-banking. The bill remains pending full legislative approval as of August 2025.
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