States are now Calling for “Fair Access” to Financial Services

Florida and Tennessee Have ratified Fair Access Statutes; Eight Other States Are Considering Similar Laws

SUMMARY

An increasing number of states have enacted or are considering enacting legislation requiring financial institutions to provide customers “fair access” to financial services. These fair access requirements, first appearing in Florida’s House Bill 3 (2023) (“FL HB 3”), generally prohibit financial institutions from denying or canceling services to a person, or otherwise discriminating against a person in making available services, on the basis of enumerated factors, commonly including political opinions, religious beliefs, “social credit scores,” or any factor that is not “quantitative, impartial, and risk-based.” On April 30, 2024, the Florida Legislature presented House Bill 989 (“FL HB 989”) to the Florida Governor for his signature; the Governor has until May 15, 2024 to act on the bill. If signed into law, FL HB 989 would, effective July 1, 2024, (1) provide for a customer complaint and investigation process for alleged violations of Florida’s fair access requirements introduced by FL HB 3, and (2) appear to expand the financial institutions subject to the fair access and related compliance attestation requirements under the Florida Financial Institutions Codes (the “Financial Institutions Codes”) to include non-Florida chartered banks.

On April 22, 2024, the Tennessee Governor signed into law House Bill 2100 (“TN HB 2100”), a fair access law that will, effective July 1, 2024, apply to, among others, national banks and state banks with more than $100 billion in assets, as well as insurers. At least eight other states—Arizona, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, South Dakota—are also considering fair access bills, some of which would apply to payment processors, payment networks, and credit card companies and networks in addition to banks and insurers.

Compliance with fair access laws, including any related compliance attestation and customer complaint response requirements, may present challenges due to uncertainty regarding the scope of their application and interpretive questions regarding certain key terms, such as “social credit scores” and “quantitative, impartial and risk-based.” In addition, if more states enact fair access laws, financial institutions may be required to comply with an increasing number of fair access laws that may be inconsistent from state to
state.

The full report can be seen here:

https://www.sullcrom.com/SullivanCromwell/_Assets/PDFs/Memos/States-Require-Fair-Access-Financial-Services.pdf