- Fair Access to Financial Services Act seeks to close loophole in 1964 Civil Rights Act and bar discrimination in the banking industry for the first time
- Proposal follows several media reports of customers facing discrimination at banks
- Some large banks have committed to efforts to address the racial wealth gap in the United States and support the growth of Black- and Latinx-owned businesses
Banks would be expressly prohibited from discriminatory practices under legislation recently introduced by six Senate Democrats. The effort comes after several media reports on customers reporting racial discrimination at banks.
Under the Fair Access to Financial Services Act, banks would be forbidden from discriminating against customers based on race, color, religion, national origin, and sex, including sexual orientation and gender identity. The legislation would close a loophole in the Civil Rights Act of 1964, which barred discrimination at many businesses and public places but omitted banks from the list. As a result of this omission, customers in places with no state anti-discrimination laws have little recourse to protest discriminatory practices in banking.
Banks are currently allowed to delay transactions, add steps to an application, or otherwise impose additional requirements on certain customers without facing penalties as long as financial services are eventually provided to qualifying applicants. The proposed legislation would allow customers who feel they have been discriminated against to ask a federal court for relief, and to recover legal fees if the bank is found to be liable.
The proposal comes as some large financial institutions have announced efforts to help improve banking access for people of color, including loans, equity, and direct funds to promote the growth of Black- and Latinx-owned businesses.
