FIRM Act
Sponsored By: Senator Tim Scott
In Committee
Summary
Bans federal banking agencies from using "reputational risk" in supervising banks and credit unions. The bill would also require agencies to tailor rules to institution risk profiles, cut some reporting for community banks, and deliver several reports to Congress on implementation and modernization.
Show full summary
- Depository institutions. Agencies could not base exams, supervisory ratings, enforcement, guidance, or data collection on reputational risk, removing that factor from supervisory decisions.
- Community banks. Banks eligible for the Community Bank Leverage Ratio would be allowed to file a short-form Call Report for the first and third report of each year, reducing filing burden.
- Federal banking agencies. Agencies would have to remove references to reputational risk from guidance and manuals, tailor regulatory actions to institution risk and disclose that tailoring in rule notices, perform a seven-year look-back on recent rules with revisions due within three years, and report to Congress including a 180-day implementation confirmation and an 18-month modernization study.
- Consumers and certain industries. By eliminating reputational risk as a supervisory tool, the bill aims to limit subjective or politically driven pressures that agencies have cited in the past as restricting access to banking services.
*Would shift supervision toward traditional, material safety-and-soundness risks and impose new tailoring and reporting requirements on agencies.*
Your PRIA Score
Personalized for You
How does this bill affect your finances?
Sign up for a PRIA Policy Scan to see your personalized alignment score for this bill and every other piece of legislation we track. We analyze your financial profile against policy provisions to show you exactly what matters to your wallet.
Bill Overview
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
No supervision based on reputational risk
If enacted, federal banking agencies would be barred from using "reputational risk" in exams, rules, ratings, data collection, or enforcement. Agencies would have to remove references to reputational risk from guidance and manuals. Each agency would also have to report to Congress within 180 days describing how it implemented this change. The rule would explicitly cover banks and insured credit unions and include the CFPB and NCUA.
Tailored rules for different banks
If enacted, the OCC, Federal Reserve, FDIC, NCUA, and CFPB would have to tailor new rules to an institution's risk profile and business model. Agencies must say in every proposed and final rule how they considered tailoring. They must review final rules tied to laws from the seven years before this bill and fix ones that don't meet the tailoring rules within three years. Each agency must report to Congress within one year and then yearly about how they tailored rules.
Less reporting for some community banks
If enacted, banks that qualify for the Community Bank Leverage Ratio (CBLR) would be allowed to file a shorter Call Report. The short form would apply to the first and third report-of-condition each year. Federal banking agencies would have to write rules to put this change in place. If your community bank meets CBLR rules, it would do less reporting twice a year.
Sponsors & CoSponsors
Sponsor
Tim Scott
SC • R
Cosponsors
Katie Britt
AL • R
Sponsored 3/6/2025
Bernie Moreno
OH • R
Sponsored 3/6/2025
Jim Banks
IN • R
Sponsored 3/6/2025
Mike Crapo
ID • R
Sponsored 3/6/2025
Mike Rounds
SD • R
Sponsored 3/6/2025
Thomas Tillis
NC • R
Sponsored 3/6/2025
John Kennedy
LA • R
Sponsored 3/6/2025
Bill Hagerty
TN • R
Sponsored 3/6/2025
Cynthia Lummis
WY • R
Sponsored 3/6/2025
Pete Ricketts
NE • R
Sponsored 3/6/2025
Kevin Cramer
ND • R
Sponsored 3/6/2025
David McCormick
PA • R
Sponsored 3/6/2025
Roll Call Votes
No roll call votes available for this bill.
View on Congress.govTake It Personal
Get Your Personalized Policy View
Start a Free Government Policy Watch to see how policy affects your household, then upgrade to PRIA Full Coverage for year-round monitoring.
Already have an account? Sign in