MISSISSIPPI LEGISLATURE
2026 Regular Session
To: Banking and Financial Services
By: Representative Aguirre
AN ACT TO BE KNOWN AS THE MISSISSIPPI FAIR BANKING STANDARDS ACT; TO DECLARE THE PUBLIC POLICY OF THE STATE; TO URGE CONGRESS AND THE PRESIDENT TO STOP GOVERNMENT FROM WEAPONIZING FINANCIAL INSTITUTIONS; TO AMEND TITLE 81, MISSISSIPPI CODE OF 1972, TO CODIFY STANDARDS FOR FAIR ACCESS TO FINANCIAL SERVICES CONSISTENT WITH EXECUTIVE ORDER 14331; TO PROHIBIT STATE REGULATORS FROM COERCING FINANCIAL INSTITUTIONS INTO TERMINATING CUSTOMER ACCOUNTS BASED ON NONQUANTITATIVE FACTORS; TO REQUIRE THE DEPARTMENT OF BANKING AND CONSUMER FINANCE TO REVIEW AGENCY GUIDANCE; TO CREATE AN ADMINISTRATIVE COMPLAINT PROCESS TO RESOLVE DEBANKING COMPLAINTS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. This act shall be known and may be cited as the "Mississippi Fair Banking Standards Americans".
SECTION 2. (1) The Legislature finds that:
(a) President Donald Trump, through his August 7, 2025, Executive Order 14331, Guaranteeing Fair Banking for All Americans, and United States Senator Tim Scott, Chairman of the Senate Committee on Banking, Housing and Urban Affairs, and United States Representative French Hill, Chairman of the House Committee on Financial Services, are working to stop federal regulators from leveraging their authority to pressure banks to debank individuals and businesses;
(b) The complexity of federal laws and regulations and broad discretion of regulators have allowed federal regulators to weaponize banks for far too long;
(c) Banks are required by their regulators to manage risk, to know their customers, and to help detect and deter financial crimes, including money laundering, drug trafficking, human trafficking, and terrorism financing;
(d) Regulators require banks to file suspicious activity reports (SARs) if they suspect suspicious activity involving specific transactions and are prohibited from communicating this to customers;
(e) If examination findings indicate that a bank is not adequately managing risk, has not implemented an effective system to detect and deter financial crimes, or is not in compliance with regulations when closing accounts, the bank can face significant monetary penalties and costly lawsuits, and potentially criminal charges;
(f) The current regulatory environment has allowed federal regulators to put intense pressure on banks that can result in financial institutions managing risk by severing their relationships with businesses and individuals to minimize regulatory risks and costs;
(g) Federal banking agencies used reputational risk to limit access to lawful businesses and law-abiding citizens to financial services in 2018 when the Federal Deposit Insurance Corporation acknowledged that the agency used reputational risk reviews to limit access to financial services by certain industries, commonly known as "Operation Choke Point"; and
(h) Reputational risk has never been used as a risk category by the Department of Banking and Consumer Finance (DBCF) nor has DBCF utilized reputational risk to prevent financial institutions from providing access to financial services to lawful industries or law-abiding citizens.
(2) Although the above stated cases are instances of over-reach by federal regulatory agencies, the intent of this act by the Mississippi Legislature is to emphasize the commitment of the State of Mississippi to guaranteeing fair banking for all Mississippians.
(3) The Legislature therefore finds and declares it to be the public policy of this state that:
(a) Fair and equal access to financial services is essential for the economic viability of Mississippi citizens and businesses;
(b) Mississippians should not be denied access to financial services solely because of their constitutionally or statutorily protected beliefs, affiliations, or political views;
(c) It is the policy of the State of Mississippi to ensure that no Mississippian should be denied access to financial services because of their constitutionally or statutorily protected beliefs, affiliations, or political views, and to ensure that politicized or unlawful debanking is not used as a tool by regulators to inhibit such beliefs, affiliations, or political views;
(d) When federal regulatory agencies pressure banks to stop doing business with certain industries, it has a chilling effect that is ultimately a direct assault on free market capitalism, which created the most prosperous nation in history;
(e) Such inappropriate pressure by regulators could undermine the public trust in banking institutions and their regulators, could discriminate against lawful businesses and law-abiding citizens, and could weaponize a politicized regulatory state;
(f) It is the purpose of this act to align Mississippi regulatory standards with the Federal Executive Order "Guaranteeing Fair Banking for All Americans," ensuring that state regulators do not encourage or direct the "debanking" of lawful industries or individuals; without appropriate justification based upon a determination by the financial institution consistent with federal and state laws;
(g) Given the use of reputational risk by federal banking agencies, the Legislature desires to affirmatively preclude the potential use of reputational risk to prohibit financial institutions in the State of Mississippi from providing access to financial services to lawful industries or law-abiding citizens in the future; and
(h) The State Legislature and the Governor of Mississippi urge Mississippi's members of the U.S. House of Representatives and U.S. Senators to modernize anti-money laundering (AML) laws to better focus banks and law enforcement on potential criminal activity rather than the normal banking activity of law-abiding customers, and to ensure that there be increased transparency and accountability for regulators and bank examiners to better balance legitimate concerns relating to AML while mitigating impacts to the ability of law-abiding citizens to access financial services.
SECTION 3. For the purposes of this act, the following words have the meanings as defined in this section:
(a) "Department" means the Mississippi Department of Banking and Consumer Finance (DBCF).
(b) "Commissioner" means the Commissioner of the Department of Banking & Consumer Finance.
(c) "Financial Institution" means any bank, savings association, credit union, trust company, savings bank, or other financial provider chartered or regulated under the laws of this state, or against which the laws of this state may be enforced consistently with federal law.
(d) "Quantitative Risk" means a measurable financial risk, including credit history, debt-to-income ratio, liquidity risk, legal risk, insufficient collateral; or regulatory compliance features including, but not limited to, Anti-Money Laundering (AML) or Know Your Customer (KYC) requirements.
(e) "Reputational Risk" means the potential that negative publicity or negative public opinion regarding a financial institution's business practices, whether true or not, will cause a decline in confidence in such institution or a decline in the customer base, costly litigation, or revenue reductions, or otherwise adversely impact the financial institution.
SECTION 4. (1) The Department, the Commissioner, and any examiner or employee thereof, shall not:
(a) Direct, pressure, or encourage a financial institution to terminate, restrict, or refuse service to a customer or group of customers based on "reputational risk" or any other nonquantitative factor, provided the customer is engaged in a lawful activity; or
(b) Discriminate against a financial institution during the examination process based on the political or religious affiliations of the institution's customers.
(2) Nothing in this act shall restrict the Department from enforcing applicable state or federal laws or regulations regarding safety and soundness, other risk considerations, fraud prevention, terrorism financing, or money laundering, or other unlawful activities.
SECTION 5. (1) For the purposes of this section:
(a) "Adverse action" means a final decision by a Financial Institution to permanently close, terminate, or discontinue all transaction accounts, deposit accounts, and lending relationships held by a customer, based solely on non-risk factors as defined in subsection (d) of this section, resulting in the complete and total cessation of the financial relationship between the Financial Institution and the customer. The term "adverse action" shall not include:
(i) Changes to interest rates, fee structures, minimum balance requirements, or other standard term of service applicable to a class of customers;
(ii) The temporary suspension or restriction of an account pending an internal investigation, fraud review, or verification of identity; or
(iii) Actions taken to comply with applicable state or federal law.
(b) "Financial service" means the provision of a deposit account, savings account, payment instrument, or money transmission service. The term does not include:
(i) Wealth management, brokerage, or investment advisory services;
(ii) Insurance products or services;
(iii) Proprietary software, data analytics, or merchant processing hardware; or
(iv) Charitable donations, sponsorships, or marketing partnerships.
(c) "Risk-based standard" means any quantitative or qualitative factor, criterion, or consideration relied upon by a Financial Institution to manage its safety, soundness, compliance obligations, or legal requirements. A decision to terminate financial services is deemed to be based on a risk-based standard if it arises from or relates to:
(i) The institution's obligations under applicable state or federal law, including but not limited to obligations required pursuant to the Bank Secrecy Act ("BSA"), the USA PATRIOT Act, Anti-Money Laundering ("AML") laws, economic sanctions or other requirements imposed by the Office of Foreign Asset Control ("OFAC"), Know Your Customer ("KYC") requirements, or the filing of Suspicious Activity Reports ("SARs");
(ii) The customer's creditworthiness, liquidity, debt-to-income ratio, transaction volume, financial history, or other quantitative risk;
(iii) Suspicious, irregular, or high-volume cash activity, or transactions that trigger internal fraud or suspicious activity alerts;
(iv) The financial institution's business focus, market strategy, or the specific cost of servicing a customer relative to the revenue generated; or
(v) Actions taken to prevent fraud, manage liquidity risk, manage dispute processing, or protect transaction integrity, consistent with the standards set forth in Section 45-9-207(5), Mississippi Code of 1972.
(d) "Non-risk factor" means a factor that is wholly unrelated to a risk-based standard. This term is strictly limited to the customer's:
(i) Exercise of religion that is protected by the First Amendment to the United States Constitution, Section 18 of the Mississippi Constitution, or any federal or Mississippi law, including the federal Religious Freedom Restoration Act, 42 U.S. Code Section 2000bb, et seq. and the Mississippi Religious Freedom Restoration Act, Section 11-61-1, et seq.;
(ii) Political opinions, speech, expression, or affiliation that is protected by the First Amendment to the United States Constitution or Section 13 of the Mississippi Constitution, provided that non-risk factor shall not include speech or expressive activity that the United States Supreme Court has held is unprotected, such as obscenity, harmful to minors, fraud, incitement, true threats of violence, fighting words, harassment, defamation, or speech, expression, opinions, expressive activity, or association integral to conduct that constitutes a civil or criminal offense under applicable federal or state law.
(2) Any person (the "Complainant") who alleges an adverse action was taken against him or her by a financial institution, may submit a verified complaint, which shall be under seal and treated as confidential examination materials, pursuant to Section 81-1-81 and Section 81-41-167, Mississippi Code of 1972, to the Commissioner of Banking and Consumer Finance ("Commissioner"). The complaint must:
(a) Be in writing and signed under oath;
(b) State with particularity the facts constituting the alleged violation; and
(c) Include credible evidence that the termination of financial services was not based on any risk-based standard but was not based solely on a protected nonrisk factor.
(d) To defray the administrative costs of processing and investigation, every complaint filed under this section shall be accompanied by a filing fee of Two Hundred Dollars ($200.00).
(i) If the Commissioner determines that the financial institution violated this Act, the filing fee shall be refunded to the Complainant in full.
(ii) If the complaint is dismissed for any reason, the filing fee shall be retained by the department and deposited into the Department Maintenance Fund.
(iii) The Commissioner may waive this fee only upon a sworn affidavit of indigency consistent with the standards of the Mississippi Rules of Civil Procedure.
(e) The Complainant shall be precluded from discussing or otherwise revealing the filing or existence of such complaint, until such time as the Commissioner releases a final order, unless such final order is appealed. If the Commissioner's final order is appealed, the Complainant shall be precluded from discussing or otherwise revealing the filing or existence of the complaint until the final disposition of the matter.
(3) Upon receipt of a complaint, the Commissioner shall assign a case number and acknowledge receipt of the complaint and initiate a preliminary inquiry to determine if the complaint is frivolous or lacks merit [within a certain time frame established by the Commissioner].
(a) The Commissioner shall notify the financial institution of the complaint. The financial institution may file a written response and submit records or information regarding the account or transaction at issue.
(b) Consistent with Section 81-1-81 and Section 81-41-167, Mississippi Code of 1972, all documents, materials, and information obtained by the Commissioner during this inquiry, including the financial institution's response and internal risk assessments, shall be confidential examination materials, and shall not be subject to public disclosure, subpoena, or discovery in any civil action.
(c) If the Complainant or anyone else violates the confidentiality of the complaint, or any other documents, materials, or information obtained by the Commissioner during this inquiry, including the financial institution's response and internal risk assessments, such unlawful disclosure shall be subject to, at the discretion of the Commissioner, one or more of the following penalties:
(i) A civil penalty to be determined by the Commissioner;
(ii) Restitution to any individual or entity that suffers economic or noneconomic damages by the disclosure; and
(iii) The dismissal of the complaint with prejudice.
(4) In any proceeding under this section, the burden of proof shall rest at all times with the Complainant to establish by clear and convincing evidence that:
(a) The financial institution terminated financial services to the Complainant, and
(b) The action was taken solely based on a protected non-risk factor as defined in this Act, and not any other business or riskbased standard, including but not limited to, fraud, liquidity risk or legal risk. The financial institution shall not bear the burden of proving a negative or establishing the validity of its risk management or legal decisions.
(5) There shall be a rebuttable presumption that the financial institution's action was based on a valid risk-based standard or legal precedent.
(6) (a) If the Complainant fails to meet the burden of proof, or if the financial institution articulates a risk-based or legal standard for its action, the Commissioner shall dismiss the complaint with prejudice.
(b) Only if the Commissioner finds that the Complainant has met the burden of proof and that the institution's action was based solely on a protected nonrisk or nonlegal factor, the Commissioner may issue a Cease and Desist Order.
(7) Nothing in this section shall be construed to require a financial institution to provide services if doing so would be inconsistent with safe and sound banking practices as defined by state or federal law, or if it would violate the institution's Anti-Money Laundering ("AML"), Bank Secrecy Act ("BSA"), Know Your Customer ("KYC"), or other statutory or regulatory obligations.
SECTION 6. (1) If the Commissioner determines that a complaint was filed without substantial justification, the Commissioner may impose an administrative penalty against the Complainant to recover the department's costs of investigation and administration.
(2) For purposes of this section, "without substantial justification" shall have the same meaning as set forth in the Mississippi Litigation Accountability Act, Section 11-55-3, including but not limited to claims that are:
(a) Frivolous, groundless in fact or in law;
(b) Vexatious or filed for the purpose of harassment, delay, or increasing the cost of compliance for the financial institution; or
(c) Filed despite the Complainant having actual knowledge that the termination of services was based on a valid Risk-Based or legal Standard.
(3) Upon a finding that a complaint was filed without substantial justification, the Commissioner may order the Complainant to pay the reasonable costs incurred by the department in processing the complaint, up to a maximum of Five Thousand Dollars ($5,000.00). This assessment shall be in addition to the forfeiture of the filing fee.
(4) Any Complainant against whom a penalty is assessed under this section shall be barred from filing any future complaints under this Act until such penalty is paid in full.
SECTION 7. (1) For purposes of this Act, the decision of the Commissioner shall be final and conclusive. There shall be no right of appeal except as strictly provided in this section.
(2) An aggrieved party may seek judicial review of the Commissioner's final order only by filing a petition in the Chancery Court of the First Judicial District of Hinds County, or in the Chancery Court of the County in which the bank is domiciled, if within Mississippi, within thirty (30) days of the order.
(3) The review shall be conducted by the court without a jury and shall be confined solely to the administrative record established before the Commissioner. The court shall not receive new evidence, testimony, or discovery.
(4) The Court shall not substitute its judgment for that of the Commissioner. The Court shall affirm the Commissioner's decision unless the petitioner proves that the decision was arbitrary and capricious.
(5) In any such review, the power of the court is limited to affirming the decision or remanding the case to the Commissioner for further proceedings. The court shall have no authority to award monetary damages, attorney's fees, or costs against the financial institution or the department.
SECTION 8. (1) Upon the issuance of a final Cease and Desist Order finding that a financial institution has violated this Act, the Commissioner shall, within ten (10) business days transmit a certified copy of the order to the State Treasurer.
(2) Upon receipt of such notification, the Treasurer may, in his or her sole discretion, review the financial institution's status as a qualified public depository under Section 27-105-5 and Section 27-105-6.
(3) If the Treasurer determines that the violation raises concerns regarding the financial institution's suitability to hold public funds, the Treasurer may take such action as is authorized by law, including but not limited to:
(a) Temporarily suspending the financial institution's eligibility to receive new public fund deposits for a period not to exceed one (1) year;
(b) Revoking the financial institution's commission as a qualified public funds depository pursuant to Section 27-105-5 following a hearing; or
(c) Requiring the Financial Institution to pledge additional collateral or increase its security requirements as a condition of retaining public funds, consistent with the Treasurer's authority under Section 27-105-5(4).
SECTION 9. Nothing in this act shall be construed to create a private right of action, a claim for damages, or a basis for civil liability against a financial institution, its officers, or its employees in any court of this State.
SECTION 10. The Secretary of State shall send copies of this act to each of Mississippi's members of the U.S. House of Representatives and U.S. Senate, as well as to appointed officials leading the Federal Reserve, the Office of the Comptroller of the Currency, and the FDIC.
SECTION 11. Nothing in this act shall be construed to impair or otherwise affect the authority granted by law to the department, the Commissioner, and any examiner or employee thereof.
SECTION 12. This act shall take effect and be in force from and after July 1, 2026.