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- David Ibsen says HB 1597 is unnecessary and would add additional confusion and regulation that could harm Mississippi consumers and smaller community banks.
The Mississippi economy functions best when its residents have ready and fair access to financial services. It’s how Mississippi businesses ensure steady cashflow and make payroll, places of worship process and store charitable donations, and how Mississippi nonprofits manage the dollars that fund programs for the community. Banking is an essential service for all Mississippians.
This session, lawmakers in Jackson are considering House Bill 1597 in order to address a concern regarding government driven “debanking” which entails the closure or limitation of bank accounts or services for disfavored political or religious reasons. Mississippi lawmakers are well intentioned in their desire to protect Mississippi residents. However, President Trump and Congress are already working to address government driven banking by taking action to rein in the politicized regulators who have taken advantage of our vague, outdated policies to pressure banks to close certain accounts.
Given these positive and decisive actions, this Mississippi proposal is unnecessary and would add additional confusion and regulation that could harm Mississippi consumers and smaller community banks. Americans need a cohesive, clear and consistent federal approach that works in all 50 states, not a patchwork of state-by-state requirements that complicate national banking operations and harms consumers.
Under the Obama and Biden administrations, regulatory agencies used ambiguous standards and outdated laws to pressure banks into debanking customers based on their political affiliations or beliefs. To ensure this doesn’t happen again, President Trump issued an executive order to ensure fair access to banking that restricted the use of so called “reputational risk” as a regulatory supervision metric. Congress and the U.S. Treasury are now working to codify this principle into permanent law to find a long-term fix.
For example, the FIRM and STREAMLINE Acts would ensure fair access to banking services and update outdated provisions of the Bank Secrecy Act that have enabled government-driven debanking. At the same time, numerous federal agencies such as the FDIC, the OCC and the Treasury have amended their guidelines to follow in step with the president’s order.
Clearly there is momentum to address government-driven debanking at the federal level, and I encourage Mississippi to support the President and lawmakers in Washington in this critically important work. Although it is tempting for states like Mississippi to take action to address the wrong of government driven debanking, conflicting state regulations create compliance nightmares for banks that operate across state lines, which ultimately raises costs for financial institutions and reduces banking options for consumers.
Texas and Louisiana have recognized this reality by supporting the White House’s leadership on the issue and exercising prudent restraint to avoid a patchwork of 50 differing debanking laws. Mississippi should take the same approach and support the development of a clear and unified national solution instead of adding another layer of compliance that would complicate how banks serve communities across the nation.
Mississippi has long prided itself on supporting free market values that benefit local business, encourage, job creation, and reject unnecessary red tape. HB 1597, despite its good intentions, risks undermining those values while duplicating efforts already underway at the federal level.
Protecting Americans from unfair debanking is an important goal, but the answer is not a nation full of overlapping and contradicting fair access laws. What’s needed instead is a clear, consistent federal standard that protects consumers while ensuring that the world’s greatest financial sector is free to operate in a manner that ensures the best services for its customers.
Mississippi lawmakers rightly want their constituents to have genuine financial freedom, access, and opportunity, and also for businesses to operate free from harmful government interference. The best way to achieve this is by supporting a nationwide solution to debanking. House Bill 1597 is a state-level band-aid that will likely harm the very Mississippians they seek to protect.
Mississippi lawmakers should reject House Bill 1597.
