Sens. Cruz, Rubio, Colleagues Introduce FDIC Act to Combat Banks Political Attacks on Federal Contractors
February 5, 2021
WASHINGTON, D.C. - U.S. Sens. Ted Cruz (R-Texas), Marco Rubio (R-Fla.), Kevin Cramer (R-N.D.), Tom Cotton (R-Ark.), and Marsha Blackburn (R-Tenn.) this week introduced the Financial Defense of Industrial Contractors (FDIC) Act, which would combat today's political discrimination by some of the largest banks operating in the United States against federal contractors, including those which operate facilities on behalf of the Immigration Customs and Enforcement Agency (ICE).
Upon introduction, Sen. Cruz said:
"It's deeply concerning to see our country's largest banks caving to the radical Left's social agenda. Banks should be making decisions that are based on research and facts, not political pressure. I support our ICE agents and the contractors who work for them. They are risking their lives every day to keep this country safe. They deserve better."
Sen. Rubio said:
"Some of our nation's largest banks have decided to cater to the radical left's ‘woke' agenda by abusing their systemic influence in our economy to deprive law-abiding federal contractors of banking services critical to their business. Banks have a right to deny funds to certain businesses, but they shouldn't enjoy taxpayer-provided guarantees if they are undermining the public policy of the United States."
Sen. Cramer said:
"Some large banks are weaponizing their essential position in the economy to discriminate against companies who assist our immigration law enforcement operations. If they would like the right to deny service to certain companies, the federal government should have the right to withdraw its taxpayer-funded guarantees."
Sen. Cotton said:
"The Immigration and Customs Enforcement Agency employs contractors to help enforce the immigration laws that keep Americans safe. By denying critical financial services to ICE contractors, big banks have hobbled ICE's efforts to protect Americans. These banks shouldn't receive public funding if they're putting the public at risk."
Sen. Blackburn added:
"It is unacceptable that some of our nation's biggest banks have decided to deny our immigration enforcement agencies access to their services. ICE carries out its work at the direction of the United States Congress. For these big banks executives to think their political interests are worth sacrificing the nation's safety is disgraceful."
Read the full text of the bill here.
Specifically, the FDIC Act would amend the Federal Deposit Insurance Act to remove Federal Deposit Insurance Corporation (FDIC) insurance from banks with assets over $50 billion and which refuse to provide banking services to firms with an active federal contract which are otherwise creditworthy and law-abiding. If a bank violates this standard, the FDIC Board of Directors would begin the FDIC insurance termination process pursuant to the Federal Deposit Insurance Act, including a notice of intent, FDIC board hearing, and a transition phase of up to two years.
Six major banks operating in the United States-Wells Fargo, JP Morgan, Bank of America, BNP Paribas, Barclays, and SunTrust-have announced they will no longer provide depository services to contractors which operate facilities on behalf of ICE. These businesses are being denied banking services despite being law-abiding, creditworthy entities which are fulfilling services contracted by the federal government under statutory authority enacted by Congress.
These banks receive significant public support from American taxpayers. They receive explicit guarantees for their depositors' savings, and implicit guarantees from the Federal Reserve. Due to their size, they also control significant portions of the credit market directly through their lending and indirectly by setting trends and norms for other banks to follow. They control over $7 trillion in assets combined.
By denying funds to legitimate federal contractors, these banks are using their systemic importance and taxpayer-provided guarantees to counteract the public policy of the United States. Banks have a right to deny funds to whichever businesses they choose, but they should not be able to deny funds to creditworthy, law-abiding businesses because they are carrying out federal policy and continue to receive taxpayer money.