Mississippi Fair Banking Standards Act; create.

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To: Banking and Financial
Services
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representatives Aguirre, Burch, Hall

HOUSE BILL NO. 1597
(As Passed the House)

AN ACT TO BE KNOWN AS THE MISSISSIPPI FAIR BANKING STANDARDS 1
ACT; TO DECLARE THE PUBLIC POLICY OF THE STATE; TO URGE CONGRESS 2
AND THE PRESIDENT TO STOP GOVERNMENT FROM WEAPONIZING FINANCIAL 3
INSTITUTIONS; TO PROVIDE STANDARDS FOR FAIR ACCESS TO FINANCIAL 4
SERVICES CONSISTENT WITH EXECUTIVE ORDER 14331; TO PROHIBIT STATE 5
REGULATORS FROM COERCING FINANCIAL INSTITUTIONS INTO TERMINATING 6
CUSTOMER ACCOUNTS BASED ON NONQUANTITATIVE FACTORS; TO REQUIRE THE 7
DEPARTMENT OF BANKING AND CONSUMER FINANCE TO REVIEW AGENCY 8
GUIDANCE; TO CREATE AN ADMINISTRATIVE COMPLAINT PROCESS TO RESOLVE 9
DEBANKING COMPLAINTS; AND FOR RELATED PURPOSES. 10
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 11
SECTION 1. This act shall be known and may be cited as the 12
"Mississippi Fair Banking Standards Act". 13
SECTION 2. (1) The Legislature finds that: 14
(a) President Donald Trump, through his August 7, 2025, 15
Executive Order 14331, Guaranteeing Fair Banking for All 16
Americans, and United States Senator Tim Scott, Chairman of the 17
Senate Committee on Banking, Housing and Urban Affairs, and United 18
States Representative French Hill, Chairman of the House Committee 19
on Financial Services, are working to stop federal regulators from 20
leveraging their authority to pressure banks to debank individuals 21
and businesses; 22
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(b) The complexity of federal laws and regulations and 23
broad discretion of regulators have allowed federal regulators to 24
weaponize banks for far too long; 25
(c) Banks are required by their regulators to manage 26
risk, to know their customers, and to help detect and deter 27
financial crimes, including money laundering, drug trafficking, 28
human trafficking, and terrorism financing; 29
(d) Regulators require banks to file suspicious 30
activity reports (SARs) if they suspect suspicious activity 31
involving specific transactions and are prohibited from 32
communicating this to customers; 33
(e) If examination findings indicate that a bank is not 34
adequately managing risk, has not implemented an effective system 35
to detect and deter financial crimes, or is not in compliance with 36
regulations when closing accounts, the bank can face significant 37
monetary penalties and costly lawsuits, and potentially criminal 38
charges; 39
(f) The current regulatory environment has allowed 40
federal regulators to put intense pressure on banks that can 41
result in financial institutions managing risk by severing their 42
relationships with businesses and individuals to minimize 43
regulatory risks and costs; 44
(g) Federal banking agencies used reputational risk to 45
limit access to lawful businesses and law-abiding citizens to 46
financial services in 2018 when the Federal Deposit Insurance 47
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Corporation acknowledged that the agency used reputational risk 48
reviews to limit access to financial services by certain 49
industries, commonly known as "Operation Choke Point"; and 50
(h) Reputational risk has never been used as a risk 51
category by the Department of Banking and Consumer Finance (DBCF) 52
nor has DBCF utilized reputational risk to prevent financial 53
institutions from providing access to financial services to lawful 54
industries or law-abiding citizens. 55
(2) Although the above stated cases are instances of 56
over-reach by federal regulatory agencies, the intent of this act 57
by the Mississippi Legislature is to emphasize the commitment of 58
the State of Mississippi to guaranteeing fair banking for all 59
Mississippians. 60
(3) The Legislature therefore finds and declares it to be 61
the public policy of this state that: 62
(a) Fair and equal access to financial services is 63
essential for the economic viability of Mississippi citizens and 64
businesses; 65
(b) Mississippians should not be denied access to 66
financial services solely because of their constitutionally or 67
statutorily protected beliefs, affiliations, or political views; 68
(c) It is the policy of the State of Mississippi to 69
ensure that no Mississippian should be denied access to financial 70
services because of their constitutionally or statutorily 71
protected beliefs, affiliations, or political views, and to ensure 72
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that politicized or unlawful debanking is not used as a tool by 73
regulators to inhibit such beliefs, affiliations, or political 74
views; 75
(d) When federal regulatory agencies pressure banks to 76
stop doing business with certain industries, it has a chilling 77
effect that is ultimately a direct assault on free market 78
capitalism, which created the most prosperous nation in history; 79
(e) Such inappropriate pressure by regulators could 80
undermine the public trust in banking institutions and their 81
regulators, could discriminate against lawful businesses and 82
law-abiding citizens, and could weaponize a politicized regulatory 83
state; 84
(f) It is the purpose of this act to align Mississippi 85
regulatory standards with the Federal Executive Order 86
"Guaranteeing Fair Banking for All Americans," ensuring that state 87
regulators do not encourage or direct the "debanking" of lawful 88
industries or individuals without appropriate justification based 89
upon a determination by the financial institution consistent with 90
federal and state laws; 91
(g) Given the use of reputational risk by federal 92
banking agencies, the Legislature desires to affirmatively 93
preclude the potential use of reputational risk to prohibit 94
financial institutions in the State of Mississippi from providing 95
access to financial services to lawful industries or law-abiding 96
citizens in the future; and 97
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(h) The State Legislature and the Governor of 98
Mississippi urge Mississippi's members of the U.S. House of 99
Representatives and U.S. Senators to modernize anti-money 100
laundering (AML) laws to better focus banks and law enforcement on 101
potential criminal activity rather than the normal banking 102
activity of law-abiding customers, and to ensure that there be 103
increased transparency and accountability for regulators and bank 104
examiners to better balance legitimate concerns relating to AML 105
while mitigating impacts to the ability of law-abiding citizens to 106
access financial services. 107
SECTION 3. For the purposes of this act, the following words 108
have the meanings as defined in this section: 109
(a) "Department" means the Mississippi Department of 110
Banking and Consumer Finance (DBCF). 111
(b) "Commissioner" means the Commissioner of the 112
Department of Banking and Consumer Finance. 113
(c) "Financial institution" means any bank, savings 114
association, credit union, trust company, savings bank, or other 115
financial provider chartered or regulated under the laws of this 116
state, or against which the laws of this state may be enforced 117
consistently with federal law. 118
(d) "Quantitative risk" means a measurable financial 119
risk, including credit history, debt-to-income ratio, liquidity 120
risk, legal risk, insufficient collateral, or regulatory 121
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compliance features including, but not limited to, Anti-Money 122
Laundering (AML) or Know Your Customer (KYC) requirements. 123
(e) "Reputational risk" means the potential that 124
negative publicity or negative public opinion regarding a 125
financial institution's business practices, whether true or not, 126
will cause a decline in confidence in such institution or a 127
decline in the customer base, costly litigation, or revenue 128
reductions, or otherwise adversely impact the financial 129
institution. 130
SECTION 4. (1) The department, the commissioner, and any 131
examiner or employee thereof, shall not: 132
(a) Direct, pressure, or encourage a financial 133
institution to terminate, restrict, or refuse service to a 134
customer or group of customers based on reputational risk or any 135
other nonquantitative factor, provided the customer is engaged in 136
a lawful activity; or 137
(b) Discriminate against a financial institution during 138
the examination process based on the political or religious 139
affiliations of the institution's customers. 140
(2) Nothing in this act shall restrict the department from 141
enforcing applicable state or federal laws or regulations 142
regarding safety and soundness, other risk considerations, fraud 143
prevention, terrorism financing, or money laundering, or other 144
unlawful activities. 145
SECTION 5. (1) For the purposes of this section: 146
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(a) "Adverse action" means a final decision by a 147
financial institution to permanently close, terminate, or 148
discontinue all transaction accounts, deposit accounts, and 149
lending relationships held by a customer, based solely on non-risk 150
factors as defined in subsection (d) of this section, resulting in 151
the complete and total cessation of the financial relationship 152
between the financial institution and the customer. The term 153
"adverse action" shall not include: 154
(i) Changes to interest rates, fee structures, 155
minimum balance requirements, or other standard terms of service 156
applicable to a class of customers; 157
(ii) The temporary suspension or restriction of an 158
account pending an internal investigation, fraud review, or 159
verification of identity; or 160
(iii) Actions taken to comply with applicable 161
state or federal law. 162
(b) "Financial service" means the provision of a 163
deposit account, savings account, payment instrument, or money 164
transmission service. The term does not include: 165
(i) Wealth management, brokerage, or investment 166
advisory services; 167
(ii) Insurance products or services; 168
(iii) Proprietary software, data analytics, or 169
merchant processing hardware; or 170
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(iv) Charitable donations, sponsorships, or 171
marketing partnerships. 172
(c) "Risk-based standard" means any quantitative or 173
qualitative factor, criterion, or consideration relied upon by a 174
financial institution to manage its safety, soundness, compliance 175
obligations, or legal requirements. A decision to terminate 176
financial services is deemed to be based on a risk-based standard 177
if it arises from or relates to: 178
(i) The institution's obligations under applicable 179
state or federal law, including but not limited to obligations 180
required pursuant to the Bank Secrecy Act ("BSA"), the USA PATRIOT 181
Act, Anti-Money Laundering ("AML") laws, economic sanctions or 182
other requirements imposed by the Office of Foreign Asset Control 183
("OFAC"), Know Your Customer ("KYC") requirements, or the filing 184
of Suspicious Activity Reports ("SARs"); 185
(ii) The customer's creditworthiness, liquidity, 186
debt-to-income ratio, transaction volume, financial history, or 187
other quantitative risk; 188
(iii) Suspicious, irregular, or high-volume cash 189
activity, or transactions that trigger internal fraud or 190
suspicious activity alerts; 191
(iv) The financial institution's business focus, 192
market strategy, or the specific cost of servicing a customer 193
relative to the revenue generated; or 194
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(v) Actions taken to prevent fraud, manage 195
liquidity risk, manage dispute processing, or protect transaction 196
integrity, consistent with the standards set forth in Section 197
45-9-207(5). 198
(d) "Non-risk factor" means a factor that is wholly 199
unrelated to a risk-based standard. This term is strictly limited 200
to the customer's: 201
(i) Exercise of religion that is protected by the 202
First Amendment to the United States Constitution, Section 18 of 203
the Mississippi Constitution, or any federal or Mississippi law, 204
including the federal Religious Freedom Restoration Act, 42 U.S. 205
Code Section 2000bb, et seq. and the Mississippi Religious Freedom 206
Restoration Act, Section 11-61-1, et seq.; 207
(ii) Political opinions, speech, expression, or 208
affiliation that is protected by the First Amendment to the United 209
States Constitution or Section 13 of the Mississippi Constitution, 210
provided that non-risk factor shall not include speech or 211
expressive activity that the United States Supreme Court has held 212
is unprotected, such as obscenity, harmful to minors, fraud, 213
incitement, true threats of violence, fighting words, harassment, 214
defamation, or speech, expression, opinions, expressive activity, 215
or association integral to conduct that constitutes a civil or 216
criminal offense under applicable federal or state law. 217
(2) Any person (the "Complainant") who alleges an adverse 218
action was taken against him or her by a financial institution, 219
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may submit a verified complaint, which shall be under seal and 220
treated as confidential examination materials, pursuant to Section 221
81-14-167, to the commissioner. The complaint must: 222
(a) Be in writing and signed under oath; 223
(b) State with particularity the facts constituting the 224
alleged violation; and 225
(c) Include credible evidence that the termination of 226
financial services was not based on any risk-based standard but 227
was not based solely on a protected nonrisk factor. 228
(d) To defray the administrative costs of processing 229
and investigation, every complaint filed under this section shall 230
be accompanied by a filing fee of Two Hundred Dollars ($200.00). 231
(i) If the commissioner determines that the 232
financial institution violated this act, the filing fee shall be 233
refunded to the Complainant in full. 234
(ii) If the complaint is dismissed for any reason, 235
the filing fee shall be retained by the department and deposited 236
into the Department Maintenance Fund. 237
(iii) The commissioner may waive this fee only 238
upon a sworn affidavit of indigency consistent with the standards 239
of the Mississippi Rules of Civil Procedure. 240
(e) The Complainant shall be precluded from discussing 241
or otherwise revealing the filing or existence of such complaint, 242
until such time as the commissioner releases a final order, unless 243
such final order is appealed. If the commissioner's final order 244
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is appealed, the Complainant shall be precluded from discussing or 245
otherwise revealing the filing or existence of the complaint until 246
the final disposition of the matter. 247
(3) Upon receipt of a complaint, the commissioner shall 248
assign a case number and acknowledge receipt of the complaint and 249
initiate a preliminary inquiry to determine if the complaint is 250
frivolous or lacks merit within twenty (20) business days from the 251
receipt of the complaint. 252
(a) The commissioner shall notify the financial 253
institution of the complaint. The financial institution shall 254
file a written response and submit records or information 255
regarding the account or transaction at issue. 256
(b) Consistent with Section 81-1-81 and 81-14-167, all 257
documents, materials, and information obtained by the commissioner 258
during this inquiry, including the financial institution's 259
response and internal risk assessments, shall be confidential 260
examination materials, and shall not be subject to public 261
disclosure, subpoena, or discovery in any civil action. 262
(c) If the Complainant or anyone else violates the 263
confidentiality of the complaint, or any other documents, 264
materials, or information obtained by the commissioner during this 265
inquiry, including the financial institution's response and 266
internal risk assessments, such unlawful disclosure shall be 267
subject to, at the discretion of the commissioner, one or more of 268
the following penalties: 269
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(i) A civil penalty to be determined by the 270
commissioner; 271
(ii) Restitution to any individual or entity that 272
suffers economic or noneconomic damages by the disclosure; and 273
(iii) The dismissal of the complaint with 274
prejudice. 275
(4) In any proceeding under this section, the burden of 276
proof shall rest at all times with the Complainant to establish by 277
clear and convincing evidence that: 278
(a) The financial institution terminated financial 279
services to the Complainant; and 280
(b) The action was taken solely based on a protected 281
non-risk factor as defined in this act, and not any other business 282
or riskbased standard, including but not limited to, fraud, 283
liquidity risk or legal risk. The financial institution shall not 284
bear the burden of proving a negative or establishing the validity 285
of its risk management or legal decisions. 286
(5) There shall be a rebuttable presumption that the 287
financial institution's action was based on a valid risk-based 288
standard or legal precedent. 289
(6) (a) If the Complainant fails to meet the burden of 290
proof, or if the financial institution articulates a risk-based or 291
legal standard for its action, the commissioner shall dismiss the 292
complaint with prejudice. 293
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(b) Only if the commissioner finds that the Complainant 294
has met the burden of proof and that the institution's action was 295
based solely on a protected nonrisk or nonlegal factor, the 296
commissioner may issue a Cease and Desist Order. 297
(7) Nothing in this section shall be construed to require a 298
financial institution to provide services if doing so would be 299
inconsistent with safe and sound banking practices as defined by 300
state or federal law, or if it would violate the institution's 301
Anti-Money Laundering ("AML"), Bank Secrecy Act ("BSA"), Know Your 302
Customer ("KYC"), or other statutory or regulatory obligations. 303
SECTION 6. (1) If the commissioner determines that a 304
complaint was filed without substantial justification, the 305
commissioner may impose an administrative penalty against the 306
Complainant to recover the department's costs of investigation and 307
administration. 308
(2) For purposes of this section, "without substantial 309
justification" shall have the same meaning as set forth in the 310
Mississippi Litigation Accountability Act, Section 11-55-3, 311
including but not limited to claims that are: 312
(a) Frivolous, groundless in fact or in law; 313
(b) Vexatious or filed for the purpose of harassment, 314
delay, or increasing the cost of compliance for the financial 315
institution; or 316
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(c) Filed despite the Complainant having actual 317
knowledge that the termination of services was based on a valid 318
risk-based or legal standard. 319
(3) Upon a finding that a complaint was filed without 320
substantial justification, the commissioner may order the 321
Complainant to pay the reasonable costs incurred by the department 322
in processing the complaint, up to a maximum of Five Thousand 323
Dollars ($5,000.00). This assessment shall be in addition to the 324
forfeiture of the filing fee. 325
(4) Any Complainant against whom a penalty is assessed under 326
this section shall be barred from filing any future complaints 327
under this act until such penalty is paid in full. 328
SECTION 7. (1) For purposes of this act, the decision of 329
the commissioner shall be final and conclusive. There shall be no 330
right of appeal except as strictly provided in this section. 331
(2) An aggrieved party may seek judicial review of the 332
commissioner's final order only by filing a petition in the 333
Chancery Court of the First Judicial District of Hinds County, or 334
in the Chancery Court of the County in which the bank is 335
domiciled, if within Mississippi, within thirty (30) days of the 336
order. 337
(3) The review shall be conducted by the court without a 338
jury and shall be confined solely to the administrative record 339
established before the commissioner. The court shall not receive 340
new evidence, testimony, or discovery. 341
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(4) In any such review, the power of the court is limited to 342
affirming the decision or remanding the case to the commissioner 343
for further proceedings. The court shall have no authority to 344
award monetary damages, attorney's fees, or costs against the 345
financial institution or the department. 346
SECTION 8. (1) Upon the issuance of a final Cease and 347
Desist Order finding that a financial institution has violated 348
this act, the commissioner shall, within ten (10) business days 349
transmit a certified copy of the order to the State Treasurer. 350
(2) Upon receipt of such notification, the Treasurer shall 351
review the financial institution's status as a qualified public 352
depository under Section 27-105-5 and Section 27-105-6. 353
(3) If the Treasurer determines that the violation raises 354
concerns regarding the financial institution's suitability to hold 355
public funds, the Treasurer shall take such action as is 356
authorized by law, including but not limited to: 357
(a) Temporarily suspending the financial institution's 358
eligibility to receive new public fund deposits for a period not 359
to exceed one (1) year; 360
(b) Revoking the financial institution's commission as 361
a qualified public funds depository pursuant to Section 27-105-5 362
following a hearing; or 363
(c) Requiring the financial institution to pledge 364
additional collateral or increase its security requirements as a 365
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ST: Mississippi Fair Banking Standards Act;
create.
condition of retaining public funds, consistent with the 366
Treasurer's authority under Section 27-105-5(4). 367
SECTION 9. Nothing in this act shall be construed to create 368
a private right of action, a claim for damages, or a basis for 369
civil liability against a financial institution, its officers, or 370
its employees in any court of this state. 371
SECTION 10. The Secretary of State shall send copies of this 372
act to each of Mississippi's members of the U.S. House of 373
Representatives and U.S. Senate, as well as to appointed officials 374
leading the Federal Reserve, the Office of the Comptroller of the 375
Currency, and the FDIC. 376
SECTION 11. Nothing in this act shall be construed to impair 377
or otherwise affect the authority granted by law to the 378
department, the commissioner, and any examiner or employee 379
thereof. 380
SECTION 12. This act shall take effect and be in force from 381
and after July 1, 2026. 382