Tennessee Introduces Law to Ban Political, Religious Discrimination by Banks and Insurers

The Tennessee State Capitol in Nashville on March 29, 2023. (Chase Smith/The Epoch Times)

Tennessee this week became the latest state to join the fight against what lawmakers say is an attempt by America’s largest banks to impose social credit scores on customers. 

Following similar actions in states such as Florida and Iowa, Republican State Rep. Jason Zachary introduced a bill that would bar banks and insurance companies from discriminating against customers in Tennessee because of their political or religious beliefs. 

“This legislation prohibits the 20 largest banks in our country from denying financial services to any Tennessean based on political speech, religious belief, or a social credit score,” Mr. Zachary stated on Feb. 27 at a state House Banking and Consumer Affairs Committee hearing.

The legislation, House Bill 2100, would add to the state’s existing consumer protection laws and apply to banks with $100 billion in assets or more. It would not apply to the bank’s underwriting standards for issuing credit, and it would still permit banks to deny services on political or religious grounds—if such terms were clearly stated in the bank’s customer policies.

The Tennessee bill comes in response to claims by bank customers that they have been “debanked” due to their political or religious affiliations.

“It’s happening here in Tennessee,” Matt Sharp, counsel at the Alliance Defending Freedom (ADF), testified.“What large banks now label as ‘reputational risk’ is just a cover for discrimination against consumers because of their religious beliefs and political views.

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“Last year, Bank of America closed the long-standing bank account of Indigenous Advanced Ministries (IAM), a Memphis-based Christian nonprofit that helps impoverished widows and children in Uganda,” he said. “Bank of America also closed the account of a local church that donates to the ministry.” 

IAM founder Steve Happ told The Epoch Times in August 2023 that the organization’s accounts were abruptly closed, and he was notified in a letter from Bank of America that IAM was “a business type we have chosen not to service.” Mr. Happ said he couldn’t get an answer on what policies he had violated and speculated that the accounts were closed because of IAM’s religious affiliation. 

“I asked many times, and they would not say other than they were no longer going to support a business of this type,” Mr. Happ said.

Bank of America spokesperson William Halldin responded at the time that the accounts were closed for other reasons, telling The Epoch Times that “religious beliefs are not a factor in any account-closing decision.”

Religious Freedom ‘Under Attack’ in America

Matt Goddard, senior adviser to the National Committee for Religious Freedom (NCRF), testified that his organization’s accounts were closed by Chase Bank, without prior notice, in 2022. Employees of the organization discovered that they no longer had bank accounts there when they went to a local branch to make a deposit. 

“They were told the decision was made at the corporate level, and it was irrevocable, and that’s all we were told,” Mr. Goddard stated. “After a lot of searching over the next year, we received four additional reasons why the account was closed, and none of them corrected the previous one, and they were all different.”

“If there’s a reason, if we missed a payment or something, put it in writing, let us know the terms of service,” Mr. Goddard said. “But what we see time and time again is these shifting reasons that ultimately seem to boil down to concerns about what seems like a disagreement because of beliefs or values and things like that, and we hope we can get to the bottom of it.”

The NCRF was founded in 2022 by former Kansas governor, U.S. senator, and U.S. ambassador-at-large for International Religious Freedom, Sam Brownback. 

“When the ambassador was overseas fighting for the rights of people for religious freedom in other countries, he was very concerned that we were losing ground in this important area at home,” Mr. Goddard said. “We, of course, have the First Amendment guaranteeing the right to free exercise of religion, but that is something that seems to be under attack in many quarters.”

In May 2023, attorneys general from 19 states wrote to JPMorgan Chase CEO Jamie Dimon, charging that “JPMorgan Chase & Co. has persistently discriminated against certain customers due to their religious or political affiliation.”

Amy Heaslet, executive vice president of the Tennessee Bankers Association (TBA), said TBA opposes the bill, which she called “a solution in search of a problem that doesn’t exist.”

“This legislation would not only allow the government to tell banks who they open accounts for and who they must lend to, but also it sets government-imposed criteria that banks must use and not use when making decisions,” Ms. Heaslet said. 

“Prohibiting banks from using reputational risk as a factor means the bank cannot refuse to bank a business that promotes inappropriate or unethical conduct, such as adult stores, the Church of Satan, or marijuana shops,” she said.

Bank industry representatives testified that banks were already prohibited by federal law from discriminating against customers for political reasons, but Mr. Zachary refuted that claim.

“The Equal Credit Opportunity Act, which is what they were discussing, only applies to credit transactions,” he said. “It does not cover bank accounts, checking accounts, and other financial services that are included in this bill.”

“The big banks should have no problem with this if they are not doing that to the people of Tennessee,” Rep. Zachary stated. The bill also applies to insurance companies, and “the insurance companies had no problem with it,” he said.