On March 6, 2025, Senate Banking Committee Chairman Senator Tim Scott (R-SC) introduced the FIRM Act, a bill that would prohibit financial regulators from considering reputational risk as a factor in their assessment of financial depository institutions. On April 8, Congressmen Andy Barr (R-KY) and Ritchie Torres (D-NY) introduced a companion bill to the House of Representatives. The bills are a response to bipartisan concern about improper “debanking,” the practice of banks shutting down accounts of or refusing services to high-risk customers. While banks have broad discretion over customer accounts, some policymakers believe that banks have unfairly restricted access to financial services for certain groups and industries out of concern about their associated reputational risk.

The 1984 Supreme Court decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. established the ‘Chevron deference’ doctrine, which required courts to defer to administrative agency interpretations of ambiguous statutes if they were reasonable. This doctrine significantly impacted the financial services sector, making it difficult to challenge the US Department of the Treasury's actions, such as sanctions and penalties.