Financial regulators have weaponized their power to target disfavored political groups and individuals in America, hiding behind opaque veils of confidentiality and insincere proclamations of independence. We must rein in these rogue regulators.
Chairman Tim Scott’s Financial Integrity and Regulation Management (FIRM) Act curtails the political weaponization of the Federal banking agencies by eliminating the ability for regulators to use “reputational risk” as a component of the supervision of federally regulated financial institutions.
The FIRM Act will:
- Eliminate all references to reputational risk as a measure to determine the safety and soundness of regulated depository institutions.
- Eliminate the Federal banking agencies’ ability to promulgate new rules or guidance that use reputational risk to supervise or regulate depository institutions.
- Require the Federal banking agencies to report to Congress on their elimination of reputational risk as a component of the supervision of depository institutions.
This bill is narrowly tailored so that removal of this subjective factor does not affect quantitative supervisory measures (e.g. concentration risk, liquidity risk, etc.).