Alabama 2025 Regular Session

Alabama Senate Bill SB228 Compare Versions

Only one version of the bill is available at this time.

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1	1	SB228INTRODUCED
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3	3	SB228
4	4	BYY5GJ4-1
5	5	By Senators Jones, Orr, Roberts, Butler, Kitchens, Kelley,
6	6	Bell, Sessions, Allen, Givhan, Stutts
7	7	RFD: Banking and Insurance
8	8	First Read: 05-Mar-25
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14	14	6 BYY5GJ4-1 03/05/2025 TRP (L)bm 2025-514
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16	16	First Read: 05-Mar-25
17	17	SYNOPSIS:
18	18	Under existing federal law, banks are prohibited
19	19	from engaging in lending practices that discriminate on
20	20	the basis of race, ethnicity, religion, and other
21	21	factors.
22	22	This bill would provide legislative findings and
23	23	define certain terms.
24	24	This bill would define "social credit score" to
25	25	include a person exercising his or her lawful right to
26	26	religion or speech, failing or refusing to facilitate
27	27	or conduct certain practices, or engaging in certain
28	28	business activities.
29	29	This bill would allow a financial institution or
30	30	insurer to claim a religious purpose exemption when
31	31	making certain determinations regarding the provision
32	32	of services.
33	33	This bill would prohibit certain financial
34	34	institutions and insurers from using a social credit
35	35	score and other nonquantitative or biased factors to
36	36	discriminate in the provision of services.
37	37	This bill would provide penalties for
38	38	violations.
39	39	This bill would also provide that a violation
40	40	would authorize the Alabama State Banking Department or
41	41	the Alabama Department of Insurance to enforce the act;
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71	71	the Alabama Department of Insurance to enforce the act;
72	72	and provide for penalties for the violation.
73	73	A BILL
74	74	TO BE ENTITLED
75	75	AN ACT
76	76	Relating to financial institutions; to establish the
77	77	Equality in Financial Services Act; to prohibit certain
78	78	financial institutions and insurers from discriminating in the
79	79	provision of services by using social credit scores and other
80	80	nonquantifiable factors; to define "social credit score" and
81	81	make this a deceptive trade practice; to provide an exception
82	82	for a financial institution or insurer that claims a religious
83	83	purpose; to authorize the Alabama State Banking Department or
84	84	the Alabama Department of Insurance to enforce this act.
85	85	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
86	86	Section 1. This act shall be known and may be cited as
87	87	the Equality in Financial Services Act.
88	88	Section 2. The Legislature finds and declares all of
89	89	the following:
90	90	(1) Obtaining access to financial services is a basic
91	91	requirement for a person to meaningfully participate in the
92	92	State of Alabama's marketplace.
93	93	(2) Due to their fundamental role in the marketplace,
94	94	the State of Alabama and United States government give
95	95	financial institutions significant privileges and enact state
96	96	and federal laws that guarantee access to certain financial
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126	126	and federal laws that guarantee access to certain financial
127	127	services without discrimination based on race, color,
128	128	religion, national origin, sex, and other factors.
129	129	(3) New banks and other financial institutions face
130	130	significant barriers to entry which reduce the competitiveness
131	131	of the market and allow existing institutions to wield
132	132	significant power.
133	133	(4) Financial institutions cannot act as de facto
134	134	regulators of private conduct by denying financial services
135	135	based on a person's religious exercise, association, speech,
136	136	social views, or participation in a particular industry.
137	137	(5) Financial institutions have a responsibility to
138	138	make decisions about whether to provide a person with
139	139	financial services based on impartial criteria free from
140	140	discrimination or favoritism.
141	141	(6) Financial institutions also have a responsibility
142	142	to disclose the conditions under which they will deny
143	143	financial services, and if they deny financial services, to
144	144	provide upon request a truthful and complete explanation to
145	145	the person explaining why financial services were denied.
146	146	(7) Financial institutions face increasing internal and
147	147	external pressures to impede otherwise lawful commerce based
148	148	on a person's religious exercise, associations, speech, social
149	149	views, or participation in particular industries, and to do so
150	150	covertly, without informing the person or the public why
151	151	services were or will be denied.
152	152	(8) When financial institutions omit material
153	153	information about when they will deny financial services or
154	154	why they denied financial services to a person, this lack of
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184	184	why they denied financial services to a person, this lack of
185	185	transparency harms specific persons and the general
186	186	marketplace.
187	187	(9) This kind of deception and unfair discrimination in
188	188	the provision of financial services threatens the economy,
189	189	security, and the soundness of banking and other financial
190	190	markets in the State of Alabama.
191	191	(10) These deceptive and unfair discriminatory
192	192	practices threaten the ability of Alabama's residents to speak
193	193	freely as part of the democratic process and to live freely
194	194	according to the dictates of their conscience, and these
195	195	practices also violate the public trust.
196	196	Section 3. (a) For purposes of this act, the following
197	197	words have the following meanings:
198	198	(1) FINANCIAL INSTITUTION. a. Notwithstanding Section
199	199	8-19-7(3), Code of Alabama 1975, either of the following:
200	200	1. A bank that has total assets over twenty billion
201	201	dollars ($20,000,000,000).
202	202	2. A payment processor, credit card company, credit
203	203	card network, payment network, payment service provider, or
204	204	payment gateway that has processed more than twenty billion
205	205	dollars ($20,000,000,000) in transactions in the last calendar
206	206	year.
207	207	b. The term includes any affiliate or subsidiary
208	208	company of an entity described in paragraph a. even if that
209	209	company is also a financial institution.
210	210	(2) FINANCIAL SERVICES. Any financial product or
211	211	service offered by a financial institution.
212	212	(3) INSURER. Any person engaged in the business of
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242	242	(3) INSURER. Any person engaged in the business of
243	243	entering into contracts for insurance as indemnitor, surety,
244	244	or contractor.
245	245	(4) PERSON. Any individual, partnership, association,
246	246	joint stock company, trust, corporation, nonprofit
247	247	organization, or other business or legal entity.
248	248	(5) SOCIAL CREDIT SCORE. a. Any analysis, rating,
249	249	scoring, list, or tabulation that evaluates any of the
250	250	following:
251	251	1. A person's exercise of religion, as well as belief
252	252	and affiliation.
253	253	2. A person's speech, expression, or association,
254	254	including the person's opinions, speech, or other expressive
255	255	activities, including the lawful preservation of privacy
256	256	regarding those activities, such as the refusal to disclose
257	257	lobbying, political activity, or contributions beyond what is
258	258	required by applicable state and federal law, but excluding
259	259	obscenity, fraud, incitement, true threats, fighting words, or
260	260	defamation.
261	261	3. A person's lawful ownership of a firearm.
262	262	4. Failure or refusal to adopt any targets or
263	263	disclosures related to greenhouse gas emissions beyond what is
264	264	required by applicable state and federal law.
265	265	5. Failure or refusal to conduct any type of racial,
266	266	diversity, or gender audit or disclosure or to provide any
267	267	sort of quota, preference, or benefit based, in whole or in
268	268	part, on race, diversity, or gender.
269	269	6. Failure or refusal to facilitate or assist employees
270	270	in obtaining abortions or the services described in Section
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300	300	in obtaining abortions or the services described in Section
301	301	26-26-4, Code of Alabama 1975, regardless of the age of the
302	302	person upon whom the services will be performed.
303	303	7. A person's support for, or refusal to support or
304	304	provide services for a federal, state, or local government
305	305	policy, plan, or initiative.
306	306	8. Any lawful business associations or activity by the
307	307	person or others with firearms and ammunition manufacturers or
308	308	dealers.
309	309	9. Any lawful business association or activity by the
310	310	person or others with an oil or gas company.
311	311	b. The term does not include the financial institution
312	312	evaluating quantifiable financial risks of a person based on
313	313	impartial, financial-risk-based standards that include
314	314	activities described in paragraph a. if the standards are
315	315	established in advance by the financial institution and
316	316	publicly disclosed to customers and potential customers.
317	317	(b) These terms shall be construed in favor of the
318	318	broad protection of the conduct, opinions, and beliefs
319	319	protected by the First Amendment to the United States
320	320	Constitution, applicable federal laws, the Constitution of
321	321	Alabama of 2022, and state law.
322	322	Section 4. (a) A financial institution or insurer shall
323	323	not do either of the following:
324	324	(1) Use a social credit score to decline, directly or
325	325	indirectly, to provide full and equal enjoyment in the
326	326	provision of financial services, including refusing to
327	327	provide, terminating, or restricting financial services.
328	328	(2) Agree, conspire, or coordinate, directly or
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358	358	(2) Agree, conspire, or coordinate, directly or
359	359	indirectly, including through any intermediary or third party,
360	360	with another person or group of persons, to engage in activity
361	361	prohibited by subdivision (1).
362	362	(b) If a financial institution refuses to provide,
363	363	restricts, or terminates service to a customer, that customer
364	364	may request a statement of specific reasons within 90 days
365	365	after receiving notice of the refusal to provide, restriction
366	366	of, or termination of service. The customer may request the
367	367	statement from a customer service representative or designated
368	368	account representative by phone, U.S. mail, or electronic
369	369	mail. The financial institution shall transmit the statement
370	370	of specific reasons via U.S. mail and electronic mail within
371	371	14 days of receiving the customer's request. The statement of
372	372	specific reasons shall include all of the following:
373	373	(1) A detailed explanation of the basis for the denial
374	374	or termination of service, including a description of any of
375	375	the customer's speech, religious exercise, business activity
376	376	with a particular industry, or other conduct that was, in
377	377	whole or in part, the basis of the financial institution's
378	378	denial or termination of service.
379	379	(2) A copy of the terms of service agreed to by the
380	380	customer and the financial institution.
381	381	(3) Citations to the specific provisions of the terms
382	382	of service upon which the financial institution relied in
383	383	refusing to provide, restricting, or terminating service.
384	384	(c) A financial institution or insurer shall not deny
385	385	or cancel its services to a person, or otherwise discriminate
386	386	against a person in the provision of financial services or in
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416	416	against a person in the provision of financial services or in
417	417	the terms or conditions of financial services, on the basis of
418	418	any of the following:
419	419	(1) The person's political opinions, speech, or
420	420	affiliations.
421	421	(2) Except as provided in subsection (b), the person's
422	422	religious beliefs, religious exercise, or religious
423	423	affiliations.
424	424	(3) Any other factor if it is not a quantitative,
425	425	impartial, and risk-based standard, including any factor
426	426	related to the person's business sector.
427	427	(4) The use of a rating, scoring, analysis, tabulation,
428	428	or other action that considers a social credit score based on
429	429	factors including any of the following:
430	430	a. The person's political opinions, speech, or
431	431	affiliations.
432	432	b. Except as provided in subsection (b), the person's
433	433	religious beliefs, religious exercise, or religious
434	434	affiliations.
435	435	c. The person's lawful ownership of a firearm.
436	436	d. The person's engagement in the lawful manufacture,
437	437	distribution, sale, purchase, or use of firearms or
438	438	ammunition.
439	439	e. The person's engagement in the exploration,
440	440	production, utilization, transportation, sale, or manufacture
441	441	of fossil fuel-based energy, timber, mining, or agriculture.
442	442	f. The person's support of the state or federal
443	443	government in combating illegal immigration, drug trafficking,
444	444	or human trafficking.
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474	474	or human trafficking.
475	475	g. The person's engagement with, facilitation of,
476	476	employment by, support of, business relationship with,
477	477	representation of, or advocacy for any person described in
478	478	this subsection.
479	479	h. The person's failure to meet, failure to commit to
480	480	meet, or expected failure to meet, any of the following as
481	481	long as the person is otherwise in compliance with applicable
482	482	state or federal law:
483	483	1. Environmental standards, including emissions
484	484	standards, benchmarks, requirements, or disclosures.
485	485	2. Social governance standards, benchmarks, or
486	486	requirements, including environmental or social justice.
487	487	3. Corporate board or company employment composition
488	488	standards, benchmarks, requirements, or disclosures based on
489	489	characteristics.
490	490	4. Policies or procedures requiring or encouraging
491	491	employee participation in social justice programming,
492	492	including diversity, equity, or inclusion training.
493	493	(d) An insurer shall make determinations about the
494	494	provision of services based on an analysis of sound
495	495	underwriting and actuarial principles related to actual or
496	496	reasonably anticipated loss experience unique to each current
497	497	or prospective customer and shall not engage in a practice
498	498	described in subsection (c). This does not restrict an insurer
499	499	that claims a religious purpose from making such
500	500	determinations based on the current or prospective customer's
501	501	religious beliefs, religious exercise, or religious
502	502	affiliations.
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532	532	affiliations.
533	533	Section 5. As a condition of entering into any
534	534	agreement to provide services to the State of Alabama, its
535	535	political subdivisions, and all enumerated and nonenumerated
536	536	agencies as defined in Section 41-20-3, Code of Alabama 1975,
537	537	a financial institution or insurer shall certify to the state
538	538	that it will not violate Section 4. Providing a false or
539	539	misleading statement to this effect or violating Section 4
540	540	shall be considered a material breach of any such agreement
541	541	and shall result in an immediate termination of the agreement.
542	542	In addition, the financial institution or insurer shall be
543	543	ineligible to provide services to the state, pursuant to
544	544	Chapter 16 of Title 41, Code of Alabama 1975, its political
545	545	subdivisions, or enumerated and nonenumerated agencies for a
546	546	period of two years.
547	547	Section 6. (a) Any violation of this act by a financial
548	548	institution operating pursuant to its enumerated powers
549	549	granted in Section 5-5A-18(12), Code of Alabama 1975, shall be
550	550	enforced by the Alabama State Banking Department under its
551	551	authority to regulate banks granted in Section 5-2A-1, Code of
552	552	Alabama 1975.
553	553	(b) Any violation of this act by an insurer shall
554	554	constitute an unfair trade practice in violation of Chapter 12
555	555	of Title 27, Code of Alabama 1975.
556	556	(c)(1) A person harmed by a violation of this act may
557	557	file a complaint with the Alabama State Banking Department or
558	558	the Alabama Department of Insurance. A complaint must be filed
559	559	within 90 days from when the person knew or should have known
560	560	of the action alleged to constitute the violation of this act.
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590	590	of the action alleged to constitute the violation of this act.
591	591	(2) The Alabama State Banking Department and Alabama
592	592	Department of Insurance shall require a filing fee of up to
593	593	fifty dollars ($50) for each claim filed. If the department
594	594	substantiates the claim, the filing fee shall be reimbursed to
595	595	the complainant.
596	596	(3) Unless specifically prohibited by federal law, the
597	597	Alabama State Banking Department or the Alabama State
598	598	Department of Insurance shall open an investigation into the
599	599	facts giving rise to the complaint. Within 60 days of receipt
600	600	of the complaint, the Alabama State Banking Department or
601	601	Alabama State Department of Insurance shall either:
602	602	a. Notify the complainant that the Alabama State
603	603	Banking Department or Alabama State Department of Insurance
604	604	has determined that there has been a violation of this act and
605	605	take all necessary steps to remedy the violation, including
606	606	levying fines of actual damages suffered by the complainant or
607	607	ten thousand dollars ($10,000), whichever is greater, payable
608	608	to the complainant; or
609	609	b. Notify the complainant that the Alabama State
610	610	Banking Department or Alabama State Department of Insurance is
611	611	declining to investigate or take action to remedy the
612	612	complaint, or has found no violation.
613	613	(d) If the Alabama State Banking Department, or Alabama
614	614	Department of Insurance either finds no violation or declines
615	615	to investigate or take action to remedy the complaint, the
616	616	complainant may initiate a civil action for either or both of
617	617	the following:
618	618	(1) To recover actual damages or ten thousand dollars
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648	648	(1) To recover actual damages or ten thousand dollars
649	649	($10,000), whichever is greater, for each violation. If the
650	650	trier of fact finds that the violation was willful, it may
651	651	increase the damages to an amount of up to three times the
652	652	actual damages sustained or thirty thousand dollars ($30,000),
653	653	whichever is greater. A court shall award a prevailing
654	654	plaintiff reasonable attorney fees and court costs.
655	655	(2) To obtain preventive relief, including an
656	656	application for a permanent or temporary injunction,
657	657	restraining order, or other order as is necessary to enforce
658	658	the requirements of this act.
659	659	(e)Nothing in this act shall be construed as limiting
660	660	the Attorney General's authority to investigate or take action
661	661	to remedy a violation of this act.
662	662	Section 7. This act shall become effective on October
663	663	1, 2025.
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