June 21, 2022

RELEASE: Auchincloss Financial Services Bill Passes House 


RELEASE: Auchincloss Financial Services Bill Passes House 

“Consumers should have access to affordable banking services”

Washington, DC —Congressman Auchincloss’ Promoting New and Diverse Depository Institutions Act (H.R. 4590), has passed the House of Representatives as part of the Financial Services Committee’s Racial Equity, Inclusion, and Economic Justice Act. Auchincloss’ bill directs banking regulators to work together to address the challenges that new depository institutions face when applying for a bank charter. The bill specifically asks for a strategic plan that takes into consideration the challenges faced by de novo financial institutions, including minority depository institutions (MDIs) and community development financial institutions (CDFIs).

Speaking on the House floor in support of the legislation, Auchincloss stated, “Consumers should have access to affordable banking services, which requires competition in the market. Over the last several decades, there has been consolidation among banks and credit unions. This has effectively limited the products available to consumers and artificially driven up costs while closing banking branches for people who already did not have many choices. The Financial Services Racial Equity, Inclusion, Economic Justice Act includes my bipartisan bill, the Promoting New and Diverse Depository Institutions Act…My bill will help new banks, and in doing so, it will expand access to affordable services for unbanked communities.”

Starting and maintaining a new bank or credit union is a difficult process. According to the Federal Reserve, from 2009 to 2013 only seven new banks were formed. Based on the decreasing number of new banks, Congress must act to direct banking regulators to measure and mitigate the challenges new banks face. This study will inform future steps that Congress can take to expand competition and access for consumers. 

The Promoting New and Diverse Depository Institutions Act has been endorsed by the Credit Union National Association; the Chamber of Commerce; American Bankers Association; Independent Community Bankers of America; Massachusetts Bankers Association; and the Financial Technology Association