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A new bill introduced by top members of Congress would ban financial institutions from discriminating against customers based on their race, gender or sexual orientation, in line with the Biden administration’s wider efforts to fight discrimination.
Earlier this week (July 26), Democratic senators introduced the Fair Access to Financial Services Act to ensure equal treatment of Americans when they try to access services at financial institutions.
The bill practically prohibits banks and other financial institutions from discrimination in providing their services on the basis of race, colour, religion, national origin, sex, gender identity or sexual orientation.
It would also hold these institutions accountable for discriminatory practices.
“Too many Black and Brown Americans experience racial profiling and unequal treatment when trying to access services at banks and other financial institutions, and don’t have anywhere to turn to hold financial institutions accountable,” said Senator Sherrod Brown, chairman of the Senate Committee on Banking, Housing, and Urban Affairs.
“Our legislation explicitly outlaws discrimination in our nation’s financial system so that everyone can access financial services free from harassment and abuse.”
The move follows a number of incidents that shed light on racial bias in large banks recently.
In January, "Black Panther" director Ryan Coogler was briefly handcuffed by the police at a branch of Bank of America after the bank wrongly assumed he was trying to rob the bank while in fact he was trying to withdraw money.
In February, a Black doctor in Texas sued J.P. Morgan Chase alleging she was humiliated when the bank refused to open her a bank account and take a $16,000 cheque deposit on it from her employer.
Last month, Wells Fargo also came under fire after news broke that the bank was conducting fake job interviews with minority and female candidates. The practice resulted from a hiring policy that required managers to interview diverse candidates before offering someone a job.
On Wednesday (July 27), federal agencies announced the first government order against a nonbank mortgage lender for illegal discrimination. As a result of the action, Trident Mortgage Company agreed to pay $22m to settle charges that it redlined majority-minority neighbourhoods through its marketing, sales and hiring actions.
People experiencing such discrimination are unable to hold financial institutions accountable because there is no existing federal law that explicitly prohibits discrimination by banks and other financial institutions.
The proposed legislation would address this gap, aligning with the wider efforts of the Biden administration that put the fight against discrimination on top of its agenda.
On his first day in office, President Biden signed an executive order on preventing and combatting discrimination against LGBTQI+ Americans. The order directs federal agencies to “fully implement” laws that prohibit sex discrimination.
Less than a week later, he made it a policy of his administration to end housing discrimination and eliminate racial bias and other forms of discrimination in all stages of home-buying.
“This is not only a mandate to refrain from discrimination but a mandate to take actions that undo historic patterns of segregation and other types of discrimination and that afford access to long-denied opportunities,” Biden said in the memorandum.
In line with the President’s statement, Brown, the main sponsor of the anti-discrimination bill, made fair housing and racial justice a key component of the agenda of the Senate’s Banking and Housing Committee.
The bill has been backed by 19 Democrats and no Republicans, reflecting the striking contrast that exists between how the issue is viewed on both sides of the aisle.
A survey conducted in 2020 highlighted that three-quarters of Democrats (73 percent) believe that racial inequality is a critical threat to the country, while only 23 percent of Republicans felt the same.
Last year, Brown blasted the Trump administration for “systematically undermin[ing] 50 years of fair housing progress”.
Nonetheless, if the bill receives the full backing of the Democratic party, it may still have a chance to pass before the legislative session ends at the end of the year.
