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WASHINGTON (KT) – Kentucky Sixth District Congressman Andy Barr, R-Lexington, has joined with New York Democrat Ritchie Torres to introduce the Financial Integrity and Regulation Management (FIRM) Act, to keep federal banking regulators from using “reputational risk” as a justification to deny financial services to lawful businesses or individuals.

This legislation directly addresses the regulatory abuses that occurred under initiatives like Operation Choke Point, where agencies pressured banks to cut off services to legally operating businesses based on political or social factors—rather than safety and soundness concerns. The FIRM Act ensures that banking supervision remains focused on legitimate financial risks, not political agendas.

“For too long, unelected regulators have used the vague and subjective concept of reputational risk to push political ideology under the guise of bank supervision,” Barr said. “The FIRM Act restores neutrality and integrity to our financial regulatory system and protects the right of all Americans to access banking services without fear of unlawful discrimination.”

Torres noted, “The FIRM Act is about restoring fairness and objectivity to our financial system. No lawful business should be denied banking services based on subjective intent or shifting political winds. Financial regulation should be grounded in objective risk, not politicized judgments about reputational harm. I’m proud to co-lead this bipartisan legislation to ensure access to banking is determined by sound business practices — not partisan pressure.”

Sen. Tim Scott, R-SC, who chairs the Senate Banking Committee,  has introduced companion legislation in his chamber.

“Debanking federally legal businesses and law-abiding citizens is un-American, but unfortunately, we’ve seen federal banking regulators abuse ‘reputational risk’ to carry out political agendas and force financial institutions to cut off access to financial services for Americans,” Scott stated. “Fortunately, the Trump administration has taken action to end the use of this subjective tool, and the FIRM Act – which advanced out of the Senate Banking Committee – will eliminate all references to reputational risk in regulatory supervision. I’m grateful to Congressman Barr for introducing the House companion legislation and leading the effort to help end this discriminatory practice.”

The FIRM Act mandates that all federal banking agencies eliminate reputational risk as a consideration in supervisory guidance, rules, and enforcement actions. Agencies will be required to report to Congress within 180 days confirming compliance and detailing internal policy changes resulting from the law.

There’s no word on when the measure will be taken up in committee.