SB228INTRODUCED
Page 0
SB228
BYY5GJ4-1
By Senators Jones, Orr, Roberts, Butler, Kitchens, Kelley,
Bell, Sessions, Allen, Givhan, Stutts
RFD: Banking and Insurance
First Read: 05-Mar-25
1
2
3
4
5
6 BYY5GJ4-1 03/05/2025 TRP (L)bm 2025-514
Page 1
First Read: 05-Mar-25
SYNOPSIS:
Under existing federal law, banks are prohibited
from engaging in lending practices that discriminate on
the basis of race, ethnicity, religion, and other
factors.
This bill would provide legislative findings and
define certain terms.
This bill would define "social credit score" to
include a person exercising his or her lawful right to
religion or speech, failing or refusing to facilitate
or conduct certain practices, or engaging in certain
business activities.
This bill would allow a financial institution or
insurer to claim a religious purpose exemption when
making certain determinations regarding the provision
of services.
This bill would prohibit certain financial
institutions and insurers from using a social credit
score and other nonquantitative or biased factors to
discriminate in the provision of services.
This bill would provide penalties for
violations.
This bill would also provide that a violation
would authorize the Alabama State Banking Department or
the Alabama Department of Insurance to enforce the act;
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 SB228 INTRODUCED
Page 2
the Alabama Department of Insurance to enforce the act;
and provide for penalties for the violation.
A BILL
TO BE ENTITLED
AN ACT
Relating to financial institutions; to establish the
Equality in Financial Services Act; to prohibit certain
financial institutions and insurers from discriminating in the
provision of services by using social credit scores and other
nonquantifiable factors; to define "social credit score" and
make this a deceptive trade practice; to provide an exception
for a financial institution or insurer that claims a religious
purpose; to authorize the Alabama State Banking Department or
the Alabama Department of Insurance to enforce this act.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. This act shall be known and may be cited as
the Equality in Financial Services Act.
Section 2. The Legislature finds and declares all of
the following:
(1) Obtaining access to financial services is a basic
requirement for a person to meaningfully participate in the
State of Alabama's marketplace.
(2) Due to their fundamental role in the marketplace,
the State of Alabama and United States government give
financial institutions significant privileges and enact state
and federal laws that guarantee access to certain financial
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56 SB228 INTRODUCED
Page 3
and federal laws that guarantee access to certain financial
services without discrimination based on race, color,
religion, national origin, sex, and other factors.
(3) New banks and other financial institutions face
significant barriers to entry which reduce the competitiveness
of the market and allow existing institutions to wield
significant power.
(4) Financial institutions cannot act as de facto
regulators of private conduct by denying financial services
based on a person's religious exercise, association, speech,
social views, or participation in a particular industry.
(5) Financial institutions have a responsibility to
make decisions about whether to provide a person with
financial services based on impartial criteria free from
discrimination or favoritism.
(6) Financial institutions also have a responsibility
to disclose the conditions under which they will deny
financial services, and if they deny financial services, to
provide upon request a truthful and complete explanation to
the person explaining why financial services were denied.
(7) Financial institutions face increasing internal and
external pressures to impede otherwise lawful commerce based
on a person's religious exercise, associations, speech, social
views, or participation in particular industries, and to do so
covertly, without informing the person or the public why
services were or will be denied.
(8) When financial institutions omit material
information about when they will deny financial services or
why they denied financial services to a person, this lack of
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84 SB228 INTRODUCED
Page 4
why they denied financial services to a person, this lack of
transparency harms specific persons and the general
marketplace.
(9) This kind of deception and unfair discrimination in
the provision of financial services threatens the economy,
security, and the soundness of banking and other financial
markets in the State of Alabama.
(10) These deceptive and unfair discriminatory
practices threaten the ability of Alabama's residents to speak
freely as part of the democratic process and to live freely
according to the dictates of their conscience, and these
practices also violate the public trust.
Section 3. (a) For purposes of this act, the following
words have the following meanings:
(1) FINANCIAL INSTITUTION. a. Notwithstanding Section
8-19-7(3), Code of Alabama 1975, either of the following:
1. A bank that has total assets over twenty billion
dollars ($20,000,000,000).
2. A payment processor, credit card company, credit
card network, payment network, payment service provider, or
payment gateway that has processed more than twenty billion
dollars ($20,000,000,000) in transactions in the last calendar
year.
b. The term includes any affiliate or subsidiary
company of an entity described in paragraph a. even if that
company is also a financial institution.
(2) FINANCIAL SERVICES. Any financial product or
service offered by a financial institution.
(3) INSURER. Any person engaged in the business of
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112 SB228 INTRODUCED
Page 5
(3) INSURER. Any person engaged in the business of
entering into contracts for insurance as indemnitor, surety,
or contractor.
(4) PERSON. Any individual, partnership, association,
joint stock company, trust, corporation, nonprofit
organization, or other business or legal entity.
(5) SOCIAL CREDIT SCORE. a. Any analysis, rating,
scoring, list, or tabulation that evaluates any of the
following:
1. A person's exercise of religion, as well as belief
and affiliation.
2. A person's speech, expression, or association,
including the person's opinions, speech, or other expressive
activities, including the lawful preservation of privacy
regarding those activities, such as the refusal to disclose
lobbying, political activity, or contributions beyond what is
required by applicable state and federal law, but excluding
obscenity, fraud, incitement, true threats, fighting words, or
defamation.
3. A person's lawful ownership of a firearm.
4. Failure or refusal to adopt any targets or
disclosures related to greenhouse gas emissions beyond what is
required by applicable state and federal law.
5. Failure or refusal to conduct any type of racial,
diversity, or gender audit or disclosure or to provide any
sort of quota, preference, or benefit based, in whole or in
part, on race, diversity, or gender.
6. Failure or refusal to facilitate or assist employees
in obtaining abortions or the services described in Section
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140 SB228 INTRODUCED
Page 6
in obtaining abortions or the services described in Section
26-26-4, Code of Alabama 1975, regardless of the age of the
person upon whom the services will be performed.
7. A person's support for, or refusal to support or
provide services for a federal, state, or local government
policy, plan, or initiative.
8. Any lawful business associations or activity by the
person or others with firearms and ammunition manufacturers or
dealers.
9. Any lawful business association or activity by the
person or others with an oil or gas company.
b. The term does not include the financial institution
evaluating quantifiable financial risks of a person based on
impartial, financial-risk-based standards that include
activities described in paragraph a. if the standards are
established in advance by the financial institution and
publicly disclosed to customers and potential customers.
(b) These terms shall be construed in favor of the
broad protection of the conduct, opinions, and beliefs
protected by the First Amendment to the United States
Constitution, applicable federal laws, the Constitution of
Alabama of 2022, and state law.
Section 4. (a) A financial institution or insurer shall
not do either of the following:
(1) Use a social credit score to decline, directly or
indirectly, to provide full and equal enjoyment in the
provision of financial services, including refusing to
provide, terminating, or restricting financial services.
(2) Agree, conspire, or coordinate, directly or
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168 SB228 INTRODUCED
Page 7
(2) Agree, conspire, or coordinate, directly or
indirectly, including through any intermediary or third party,
with another person or group of persons, to engage in activity
prohibited by subdivision (1).
(b) If a financial institution refuses to provide,
restricts, or terminates service to a customer, that customer
may request a statement of specific reasons within 90 days
after receiving notice of the refusal to provide, restriction
of, or termination of service. The customer may request the
statement from a customer service representative or designated
account representative by phone, U.S. mail, or electronic
mail. The financial institution shall transmit the statement
of specific reasons via U.S. mail and electronic mail within
14 days of receiving the customer's request. The statement of
specific reasons shall include all of the following:
(1) A detailed explanation of the basis for the denial
or termination of service, including a description of any of
the customer's speech, religious exercise, business activity
with a particular industry, or other conduct that was, in
whole or in part, the basis of the financial institution's
denial or termination of service.
(2) A copy of the terms of service agreed to by the
customer and the financial institution.
(3) Citations to the specific provisions of the terms
of service upon which the financial institution relied in
refusing to provide, restricting, or terminating service.
(c) A financial institution or insurer shall not deny
or cancel its services to a person, or otherwise discriminate
against a person in the provision of financial services or in
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196 SB228 INTRODUCED
Page 8
against a person in the provision of financial services or in
the terms or conditions of financial services, on the basis of
any of the following:
(1) The person's political opinions, speech, or
affiliations.
(2) Except as provided in subsection (b), the person's
religious beliefs, religious exercise, or religious
affiliations.
(3) Any other factor if it is not a quantitative,
impartial, and risk-based standard, including any factor
related to the person's business sector.
(4) The use of a rating, scoring, analysis, tabulation,
or other action that considers a social credit score based on
factors including any of the following:
a. The person's political opinions, speech, or
affiliations.
b. Except as provided in subsection (b), the person's
religious beliefs, religious exercise, or religious
affiliations.
c. The person's lawful ownership of a firearm.
d. The person's engagement in the lawful manufacture,
distribution, sale, purchase, or use of firearms or
ammunition.
e. The person's engagement in the exploration,
production, utilization, transportation, sale, or manufacture
of fossil fuel-based energy, timber, mining, or agriculture.
f. The person's support of the state or federal
government in combating illegal immigration, drug trafficking,
or human trafficking.
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224 SB228 INTRODUCED
Page 9
or human trafficking.
g. The person's engagement with, facilitation of,
employment by, support of, business relationship with,
representation of, or advocacy for any person described in
this subsection.
h. The person's failure to meet, failure to commit to
meet, or expected failure to meet, any of the following as
long as the person is otherwise in compliance with applicable
state or federal law:
1. Environmental standards, including emissions
standards, benchmarks, requirements, or disclosures.
2. Social governance standards, benchmarks, or
requirements, including environmental or social justice.
3. Corporate board or company employment composition
standards, benchmarks, requirements, or disclosures based on
characteristics.
4. Policies or procedures requiring or encouraging
employee participation in social justice programming,
including diversity, equity, or inclusion training.
(d) An insurer shall make determinations about the
provision of services based on an analysis of sound
underwriting and actuarial principles related to actual or
reasonably anticipated loss experience unique to each current
or prospective customer and shall not engage in a practice
described in subsection (c). This does not restrict an insurer
that claims a religious purpose from making such
determinations based on the current or prospective customer's
religious beliefs, religious exercise, or religious
affiliations.
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
251
252 SB228 INTRODUCED
Page 10
affiliations.
Section 5. As a condition of entering into any
agreement to provide services to the State of Alabama, its
political subdivisions, and all enumerated and nonenumerated
agencies as defined in Section 41-20-3, Code of Alabama 1975,
a financial institution or insurer shall certify to the state
that it will not violate Section 4. Providing a false or
misleading statement to this effect or violating Section 4
shall be considered a material breach of any such agreement
and shall result in an immediate termination of the agreement.
In addition, the financial institution or insurer shall be
ineligible to provide services to the state, pursuant to
Chapter 16 of Title 41, Code of Alabama 1975, its political
subdivisions, or enumerated and nonenumerated agencies for a
period of two years.
Section 6. (a) Any violation of this act by a financial
institution operating pursuant to its enumerated powers
granted in Section 5-5A-18(12), Code of Alabama 1975, shall be
enforced by the Alabama State Banking Department under its
authority to regulate banks granted in Section 5-2A-1, Code of
Alabama 1975.
(b) Any violation of this act by an insurer shall
constitute an unfair trade practice in violation of Chapter 12
of Title 27, Code of Alabama 1975.
(c)(1) A person harmed by a violation of this act may
file a complaint with the Alabama State Banking Department or
the Alabama Department of Insurance. A complaint must be filed
within 90 days from when the person knew or should have known
of the action alleged to constitute the violation of this act.
253
254
255
256
257
258
259
260
261
262
263
264
265
266
267
268
269
270
271
272
273
274
275
276
277
278
279
280 SB228 INTRODUCED
Page 11
of the action alleged to constitute the violation of this act.
(2) The Alabama State Banking Department and Alabama
Department of Insurance shall require a filing fee of up to
fifty dollars ($50) for each claim filed. If the department
substantiates the claim, the filing fee shall be reimbursed to
the complainant.
(3) Unless specifically prohibited by federal law, the
Alabama State Banking Department or the Alabama State
Department of Insurance shall open an investigation into the
facts giving rise to the complaint. Within 60 days of receipt
of the complaint, the Alabama State Banking Department or
Alabama State Department of Insurance shall either:
a. Notify the complainant that the Alabama State
Banking Department or Alabama State Department of Insurance
has determined that there has been a violation of this act and
take all necessary steps to remedy the violation, including
levying fines of actual damages suffered by the complainant or
ten thousand dollars ($10,000), whichever is greater, payable
to the complainant; or
b. Notify the complainant that the Alabama State
Banking Department or Alabama State Department of Insurance is
declining to investigate or take action to remedy the
complaint, or has found no violation.
(d) If the Alabama State Banking Department, or Alabama
Department of Insurance either finds no violation or declines
to investigate or take action to remedy the complaint, the
complainant may initiate a civil action for either or both of
the following:
(1) To recover actual damages or ten thousand dollars
281
282
283
284
285
286
287
288
289
290
291
292
293
294
295
296
297
298
299
300
301
302
303
304
305
306
307
308 SB228 INTRODUCED
Page 12
(1) To recover actual damages or ten thousand dollars
($10,000), whichever is greater, for each violation. If the
trier of fact finds that the violation was willful, it may
increase the damages to an amount of up to three times the
actual damages sustained or thirty thousand dollars ($30,000),
whichever is greater. A court shall award a prevailing
plaintiff reasonable attorney fees and court costs.
(2) To obtain preventive relief, including an
application for a permanent or temporary injunction,
restraining order, or other order as is necessary to enforce
the requirements of this act.
(e)Nothing in this act shall be construed as limiting
the Attorney General's authority to investigate or take action
to remedy a violation of this act.
Section 7. This act shall become effective on October
1, 2025.
309
310
311
312
313
314
315
316
317
318
319
320
321
322
323