Originally published July 17, 2023 4:00 pm PDT
Senators JD Vance (R-OH), Cynthia Lummis (R-WY), and Roger Marshall (R-KS) have announced their plan to introduce the Financial Regulatory Accountability Act.
This legislation aims to establish a Special Inspector General within the Treasury Department to probe allegations of regulatory abuse and misconduct by financial sector regulators.
The senators expressed concerns about regulatory bias and misconduct, alleging that such behavior has gone unnoticed due to institutions’ fears of retaliation.
The legislation aims to rectify this situation.
“For far too long, federal regulators have focused on advancing the agenda of the far left at the expense of their core mission,” said Senator Vance. “This legislation aims to correct that imbalance by ensuring the banking system is governed by ethical and apolitical oversight.”
The bill seeks to limit the ability of regulators to push left-wing policy objectives through the federal regulatory system.
The Act specifically targets the practice of invoking “reputational risk” as a tool to deny access to the banking system.
“Federal agencies have abused the concept of reputational risk to deny legal industries access to the banking system,” asserted Senator Lummis.
She added, “I’m proud to join my colleague Senator Vance in introducing the Financial Regulatory Accountability Act to protect access to our financial system and ensure financial regulators cannot evade Congressional oversight.”
The senators argue that regulators have exploited their mandates to further environmental, social, and governance (ESG) agendas.
Senator Marshall pointed out, “Federal regulators have continually abused their mandates to advance radical environmental, social, and governance (ESG) agendas. Our legislation ensures that the Department of Treasury has an independent Inspector General that would provide relief to banks when regulators try to exploit their authority to take down oil and gas producers and others deemed by the woke Left as undesirable.”
Both Senators Vance and Lummis serve on the Senate Committee on Banking, Housing, and Urban Affairs, which will have jurisdiction over this legislation.
Several organizations, including Americans for Tax Reform, Credit Union National Association, National Association of Federal Insured Credit Unions, Ohio Bankers League, and Ohio Credit Union League, have thrown their support behind the proposed bill.
The announcement drew attention to the actions of the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) during the Obama administration.
The senators claim these agencies used the concept of “reputational risk” to execute Operation Chokepoint, a debanking strategy targeting gun manufacturers.
The senators also allege that the Federal Reserve, FDIC, and OCC are using “reputational risk” to limit lending to the oil and gas industry during routine supervisory check-ins.
