Senate Banking Committee Chair Tim Scott (R-S.C.) unveiled legislation Thursday taking aim at debanking. Debanking — the closure of accounts that banks consider risky, often with little notice or explanation — has become a key issue for Republicans,

Sen. Tim Scott and banking committee Republicans introduced a new bill known as the FIRM Act, which seeks to prevent debanking decisions related to concerns over reputational risk.

The Republican senator argues using reputational risk in bank supervision is problematic because it’s not statutorily required, and it represents an improper use of authority.

Senator Tim Scott's FIRM Act targets debanking, eliminating reputational risk in financial institution regulation, and curbing political agendas.

The Financial Integrity and Regulation Management Act would stop prudential regulators from writing rules or guidance that involve any use of reputational risk in supervision.

Senator Tim Scott introduces a bill to ban "reputational risk" from bank regulations, so as to not influence crypto and other industries.