Senate committee advances bill to limit 'debanking' by very large financial firms, sends to amendment order

Senate State Affairs on Friday voted to send Senate Bill 1027, the Idaho Transparency and Financial Services Act, to the fourteenth order for possible amendment after a presentation by the bill sponsor and testimony from both advocates and the banking industry.

Senator Kelly Anthon, sponsor of the bill, described it as a response to what supporters call "debanking"—the closing or refusal of financial services to individuals or organizations on the basis of political or religious views. "This senate bill ... will make illegal in Idaho" debanking by the very largest financial institutions, Anthon said, and asked the committee to send the bill forward so its language could be refined.

The bill, as presented, would require transparency from covered institutions about why an account is closed or services denied, protect certain activities and industries from being grounds for account termination, and—according to the sponsor—apply only to very large institutions that process about $100 billion a year. "This is not directed at our Idaho homegrown banks," Anthon said, adding that he had confidence in local banks.

Three witnesses spoke during the hearing. Tony Ulrich, state chairman of the Constitution Party of Idaho, described receiving a mailed check indicating an account closure and said bank staff provided no explanation; he said the closure temporarily disrupted the party's access to funds. "There was no explanation. There was no reason why," Ulrich testified about the notice he received.

Michael Ross, legal counsel for Alliance Defending Freedom, told the committee groups and individuals have experienced abrupt account closures with real-world consequences for operations and charitable trips. "No one should wonder whether they could lose their bank account or access to payment processing or other essential financial services because of their religious or political views," Ross said.

Representing the Idaho Bankers Association, Stacy Satterley urged caution. She said banks face overlapping federal and state regulations, that banks use risk-based criteria rather than a so-called "social credit score," and that the bill's private right of action raises particular concern. "The provision in this legislation that is the most concerning is the private right of action," Satterley said, and she recommended enforcement be handled by the attorney general instead.

Committee members questioned whether the bill could create conflicts with federal law or inadvertently require banks to accept clearly unlawful or high-risk customers. Sponsor Anthon said he was open to working with stakeholders on narrowing the bill's language, including considering alternatives to a private cause of action, and acknowledged the bill would be refined on the floor if needed.

A motion by Senator Harris, seconded by Senator Taves, to send Senate Bill 1027 to the fourteenth order for possible amendment passed. Senator Rekke was recorded as voting no; no other recorded roll-call counts were provided in the committee record.

The committee did not adopt the bill as final policy; the fourteenth order referral means the sponsor plans to propose amended language before floor consideration.