Senate committee hears public testimony on SB228 to curb 'debanking' practices

A Senate committee held a public hearing on SB228, a bill sponsored by Senator Jones that the sponsor said aims to prevent what supporters call "debanking"—the closure or denial of accounts and services for reasons other than traditional financial risk.

Senator Jones told the committee the bill targets account closures or denials made for ideological reasons rather than for credit or financial risk. He said the bill responds to instances in which businesses or consumers lose services over political or religious activities. "What we wanna do is make sure, that folks' accounts are not being, closed down because of their personal beliefs," Senator Jones said during his introduction.

Multiple proponents testified in support. Matt Sharp, senior counsel at Alliance Defending Freedom, characterized the practice as a contemporary form of redlining and urged protections against discrimination tied to views or business types. Sharp said the bill would bar banks above the statutory asset threshold from discriminating for listed ideological reasons while preserving decisions based on quantifiable financial risk. He also described a transparency provision in the bill requiring written explanations when permitted by federal law.

Matt Goddard, executive director of the National Committee for Religious Freedom, and Becky Garretson, executive director of Eagle Ford of Alabama, said large national banks have closed longstanding accounts without clear reasons and that SB228 would protect Alabamians’ access to banking and insurance. Garrison and other proponents argued the bill’s $20 billion asset threshold focuses the law on large, out-of-state banks rather than local community banks.

Opponents included community bankers and industry representatives who warned of costs and unintended consequences. Mac Baldwin, who identified himself as a community bank president and Alabama Bankers Association chair, said the bill would impose burdens on Alabama banks and distract regulators. Scott Latham, president of the Alabama Bankers Association, told the committee that banks make account decisions based on risk and compliance obligations and expressed concern the bill would interfere with those risk-management judgments.

Insurance and life-insurance representatives also spoke in opposition, saying existing state and federal laws regulate underwriting and account decisions. Michael Ward Davis, representing the Association of Alabama Life Insurance Companies, told the committee that rejection reasons are already reported to regulators and that the industry does not deny coverage for political or religious beliefs.

Committee members asked about procedural features of the bill. Several witnesses and senators discussed whether a consumer complaint should require review by the banking or insurance commission before a private right of action is available; the transcript shows mixed preferences among stakeholders on whether to retain the commission-first requirement or allow immediate court access.

Senator Bartlett, speaking from the committee, described personal and community experiences with racial profiling in retail and policing and raised concerns about disparate impacts if banks or institutions apply screening or refusal practices inconsistently across demographic groups. The committee discussion indicated attention to how SB228 might interact with enforcement resources and existing discrimination protections.

The committee did not record a committee vote on SB228 during the hearing. Testimony included requests for transparency and accountability from proponents and warnings from banks and insurers about regulatory costs and litigation exposure. The transcript does not record any amendment adoption or formal committee action on the bill during this session.

Speakers appearing in the SB228 hearing included Senator Jones (sponsor), Matt Sharp (Alliance Defending Freedom), Matt Goddard (National Committee for Religious Freedom), Becky Garretson (Eagle Ford of Alabama), Mac Baldwin (community banker, Alabama Bankers Association chair), Scott Latham (Alabama Bankers Association president), Michael Ward Davis (Association of Alabama Life Insurance Companies), and others who participated in the Q&A.