HF 922 (LSB 2343HV (1) 91)

HOUSE FILE 922

BY  COMMITTEE ON JUDICIARY

(SUCCESSOR TO HF 594)

A BILL FOR

An Act relating to discrimination in the provision of financial services, and providing civil penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  529A.1  Definitions.
   For purposes of this chapter, unless the context otherwise requires:
   1.  “Discriminate” or “discrimination” means a financial institution’s use of a social credit score to directly or indirectly decline to provide the full and equal enjoyment of financial services to a person, and includes refusing to provide, terminating, or restricting financial services to a person.
   2.  “Financial institution” means any bank incorporated under the provisions of any state or federal law, any savings and loan association incorporated under the provisions of federal law, any credit union organized under the provisions of any state or federal law, and any corporation licensed as an industrial loan company under chapter 536A and that is any of the following:
   a.  A bank with total assets over one hundred billion dollars.
   b.  A payment processor, credit card company, credit card network, payment network, payment service provider, or payment gateway that has processed more than one hundred billion dollars in transactions in the last calendar year.
   c.  An affiliate or subsidiary company of a financial institution.
   3.  “Financial service” means any financial product or service offered or provided by a financial institution.
   4.  “Person” means the same as defined in section 4.1.
   5.  “Protected from government interference” means any speech, religious exercise, association, expression, or conduct protected by the first amendment to the Constitution of the United States, Article I of the Constitution of the State of Iowa, or federal or state law. “Protected from government interference” does not include any speech, religious exercise, association, expression, or conduct that the United States supreme court, as of July 1, 2025, has expressly held is not protected by the first amendment to the Constitution of the United States, Article I of the Constitution of the State of Iowa, or federal or state law.
   6.  a.  “Social credit score” means an analysis, rating, scoring, list, or tabulation that evaluates any of the following:
   (1)  A person’s speech, religious exercise, association, expression, or conduct protected by the first amendment to the Constitution of the United States, Article I of the Constitution of the State of Iowa, or federal or state law.
   (2)  A person’s failure or refusal to do any of the following:
   (a)  Adopt targets or disclosures related to greenhouse gas emissions beyond targets or disclosures required by state and federal law.
   (b)  Conduct a racial, diversity, or gender audit or disclosure, or provide a quota, preference, or benefit based on race, diversity, or gender.
   (c)  Facilitate or assist an employee in obtaining an abortion or gender reassignment services.
   (3)  A person’s participation in business activities related to a manufacturer or dealer of firearms and ammunition, or business activities with an oil or gas company.
   (4)  A person’s status as an elected official or a person’s status as a politically exposed person.
   b.  “Social credit score” shall not include a financial institution’s evaluation of a person’s quantifiable financial risks based on impartial, financial-risk-based standards if such standards are established in advance by the financial institution and publicly disclosed to customers and potential customers.
    Sec. 2.  NEW SECTION.  529A.2  Discrimination prohibited.
   1.  A financial institution shall not discriminate in the provision of financial services to a person or agree, conspire, or coordinate, directly or indirectly, including through an intermediary or third party, with another person, or group of persons, to discriminate in the provision of financial services to a person.
   2.  If a financial institution refuses to provide, restricts, or terminates financial services to a person, within ninety days of the refusal, restriction, or termination, the person may request a written statement that specifies the reason for the financial institution’s refusal to provide, or restriction or termination of, the person’s financial services.
   a.  The person may request the statement from a customer service or designated account representative of the financial institution by phone, mail, or electronic mail. The person shall provide the financial institution with a mailing address and an electronic mail address where the statement can be sent. The financial institution shall transmit the statement by mail or electronic mail within fourteen business days of receiving the person’s request.
   b.  The financial institution’s statement shall include all of the following:
   (1)  A detailed explanation of the basis for the denial, restriction, or termination of the person’s financial services, including a description of the person’s speech, religious exercise, business activity with a particular industry, or other conduct that was, in whole or in part, the basis of the financial institution’s decision.
   (2)  A copy of the terms of service agreed upon, if any, by the financial institution and the person to whom the financial institution refuses to provide, or restricts or terminates, financial services, and a citation to the specific provision of the terms of service upon which the financial institution relied to refuse to provide, or to restrict or terminate, financial services.
    Sec. 3.  NEW SECTION.  529A.3  Enforcement —— penalties.
   1.  If the attorney general has reasonable belief that a financial institution is in violation of this chapter, the attorney general may bring a civil action to enforce the provisions of this chapter. Upon finding that a financial institution violated this chapter, a court may order any of the following:
   a.  Injunctive relief as necessary to enforce compliance with this chapter.
   b.  Other remedies permitted under the law.
   c.  Damages, restitution, or other compensation on behalf of residents of the state, not to exceed the amount provided by subsection 2, paragraph “a”.
   2.  A person harmed by a violation of this chapter by a financial institution may bring a civil action, and upon finding that a financial institution violated this chapter, a court may order any of the following:
   a.  Actual damages not to exceed ten thousand dollars, except if the court finds that the violation by the financial institution was willful, damages in an amount equal to three times the amount of actual damages, but not to exceed thirty thousand dollars, in addition to reasonable attorney fees and court costs.
   b.  Injunctive relief as necessary to enforce compliance with this chapter.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to discrimination by a financial institution in the provision of financial services.
   The bill prohibits a financial institution from discriminating in the provision of financial services to a person, and from agreeing, conspiring, or coordinating with another person or group of persons to discriminate in the provision of financial services to a person. “Discrimination” is defined by the bill as the use of a social credit score by a financial institution to directly or indirectly decline to provide, terminate, or restrict, financial services to a person. “Social credit score” is defined by the bill as an analysis, rating, scoring, list, or tabulation that evaluates a person’s protected speech, religious exercise, association, expression, or conduct; a person’s failure or refusal to adopt targets or disclosures related to greenhouse gas emissions beyond state and federal law requirements; a person’s failure or refusal to conduct a racial, diversity, or gender audit or disclosure; a person’s failure or refusal to facilitate or assist an employee in obtaining an abortion or gender reassignment services; a person’s participation in business activities related to a manufacturer or dealer of firearms and ammunition or business activities with an oil or gas company; or a person’s status as an elected official or a politically exposed person. “Financial institution” and “financial service” are also defined by the bill. The bill permits a person to whom a financial institution has refused to provide, restricted, or terminated financial services to request a written statement within 90 days of such action specifying the reason for the refusal, restriction, or termination. A person can request the statement from a customer service or designated account representative of the financial institution, and the person shall provide the financial institution with a mailing address and an electronic mail address where the statement can be sent. The financial institution shall transmit the statement within 14 business days of receiving the person’s request, and the statement shall include a detailed explanation of the basis for the denial, restriction, or termination, including a description of any of the person’s speech, religious exercise, business activity with a particular industry, or other conduct that was a basis for the action taken. The statement shall also include a copy of the terms of service agreed upon by the person and the financial institution, and a citation to the specific provision of the terms of service that was the basis for the action taken.
   The attorney general may bring civil action to enforce the provisions of the bill and, upon finding that a financial institution violated the bill, a court may order injunctive relief, damages, restitution, other compensation, or other remedies permitted by law. A person harmed by a violation of the bill may bring a civil action and, upon finding that a financial institution violated the bill, a court may order injunctive relief and actual damages not to exceed $10,000 or, upon a finding that the violation by the financial institution was willful, damages equal to three times the amount of actual damages but not to exceed $30,000, in addition to reasonable attorney fees and court costs.