89R11944 TYPED

By: Parker S.B. No. 949

A BILL TO BE ENTITLED

AN ACT

relating to prohibitions on deceptive and unfair practices related to financial institutions discriminating in the provision of financial services to consumers and other persons.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. This Act shall be known as the Equality in Financial Services Act.

SECTION 2. Subtitle C, Title 5, Business & Commerce Code, is amended by adding Chapter 121 to read as follows:

CHAPTER 121. PROHIBITION ON FINANCIAL SERVICES DISCRIMINATION

Sec. 121.001. DEFINITIONS. (a) In this chapter:

(1) "Discriminate in the provision of financial services" means utilizing a social credit score to directly or indirectly decline to provide full and equal enjoyment in the provision of financial services, and includes refusing to provide, terminating, or restricting financial services.

(2) "Financial institution" means

(A) A bank that has total assets over $100,000,000,000; or

(B) A payment processor, credit card company, credit card network, payment network, payment service provider, or payment gateway that has processed more than $100,000,000,000 in transactions in the last calendar year.

For purposes of subsections (A) and (B), a financial institution includes any affiliate or subsidiary company, even if that affiliate or subsidiary is also a financial institution.

(3) "Financial service" means any financial product or service offered by a financial institution.

(4) "Person" means any individual, partnership, association, joint stock company, trust, corporation, nonprofit organization, or other business or legal entity.

(5) "Protected from government interference" refers to any speech, religious exercise, association, expression, or conduct that is protected by the First Amendment other than activities that the Supreme Court of the United States has expressly held are unprotected as of the date of this legislation, such as obscenity, fraud, incitement, true threats, fighting words, or defamation.

(6) "Social credit score" means any analysis, rating, scoring, list, or tabulation that evaluates any of the following:

(A) any person's exercise of religion that is protected from government interference by the First Amendment to the United States Constitution, article 1, sections 6 and 6-a of Texas's Constitution, or federal or state law, including all aspects of religious observance and practice, as well as belief and affiliation;

(B) any person's speech, expression, or association that is protected from government interference by the First Amendment to the United States Constitution or article 1, section 8 of Texas's Constitution, or federal or state law, including the person's opinions, speech, or other expressive activities, including the lawful preservation of privacy regarding those activities, such as the refusal to disclose lobbying, political activity, or contributions beyond what is required by applicable state and federal law;

(C) failure or refusal to adopt any targets or disclosures related to greenhouse gas emissions beyond what is required by applicable state and federal law;

(D) failure or refusal to conduct any type of racial, diversity, or gender audit or disclosure or to provide any sort of quota, preference, or benefit based, in whole or in part, on race, diversity, or gender;

(E) failure or refusal to facilitate or assist employees in obtaining abortions or gender transition services; or

(F) except as provided in Subsection (b), participation in the following lawful business associations or business activities:

(a) business activity by the person or others with firearms, ammunition, or firearms accessories manufacturers or dealers; or

(b) business activity by the person or others with an entity that engages in the exploration, production, utilization, transportation, sale, or manufacturing of fossil fuel sources or fossil-fuel-based energy.

(b) For the purposes of Subsection (F) only, "social credit score" does not include the financial institution evaluating quantifiable financial risks of a person based on impartial, financial-risk-based standards that includes activities described in Subsection (F), if such standards are established in advance by the financial institution and publicly disclosed to customers and potential customers.

(c) These definitions shall be construed in favor of the broad protection of the conduct, opinions, and beliefs protected by the First Amendment to the United States Constitution, applicable federal laws, Texas's Constitution, and state law.

Sec. 121.002. PROHIBITED DISCRIMINATION IN FINANCIAL SERVICES; EXPLANATION REQUIRED UPON REQUEST. (a) A financial institution shall not:

(1) discriminate in the provision of financial services to a person; or

(2) agree, conspire, or coordinate, directly or indirectly, including through any intermediary or third party, with another person, or group of persons, to engage in activity prohibited by Subsection (1).

(b) If a financial institution refuses to provide, restricts, or terminates service to a person, that person may request a statement of specific reasons within 90 days after receiving notice of the refusal to provide, restriction of, or termination of service. The person may request the statement from a customer service representative or designated account representative by phone, U.S. mail, or electronic mail. Unless otherwise prohibited by federal law, the financial institution must transmit the statement of specific reasons via U.S. Mail and electronic mail, if known to the financial institution, within 14 days of receiving the person's request. The statement of specific reasons shall include:

(1) a detailed explanation of the basis for the denial or termination of service, including a description of any 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 denial or termination of service;

(2) a copy of the terms of service agreed to by the person and the financial institution; and

(3) a citation to the specific provisions of the terms of service upon which the financial institution relied to refuse to provide, restrict, or terminate service.

Sec. 121.003. ENFORCEMENT. (a) Any violation of this chapter shall constitute a violation of Chapter 17, Title 2, Business & Commerce Code.

(b) If the Attorney General has reasonable cause to believe that any financial institution has engaged in, is engaging in, or is about to engage in, any violation of this chapter, the Attorney General may investigate as provided in Section 17.60 and 17.61, Business & Commerce Code, may bring a civil action as provided in Section 17.47, Business & Commerce Code, and may seek remedies as provided in Section 17.62, Business & Commerce Code.

(c) Any person harmed by a violation of this chapter may initiate a civil action for either or both of the following:

(1) to recover actual damages, or $10,000, whichever is greater for each violation. If the trier of fact finds that the violation was willful, it may increase the damages to an amount of up to three times the actual damages sustained, or $30,000, whichever is greater. A court shall award a prevailing plaintiff reasonable attorneys' fees and court costs.

(2) To obtain preventive relief, including an application for a permanent or temporary injunction, restraining order, or other order as is necessary to enforce the requirements of this chapter.

SECTION 3. It is the intent of the legislature that every provision, section, subsection, sentence, clause, phrase, or word in this Act, and every application of the provisions in this Act, are severable from each other. If any application of any provision in this Act to any person, group of persons, or circumstances is found by a court to be invalid, the remaining applications of that provision to all other persons and circumstances shall be severed and may not be affected. All constitutionally valid applications of this Act shall be severed from any applications that a court finds to be invalid, leaving the valid applications in force, because it is the legislature's intent and priority that the valid applications be allowed to stand alone. The legislature further declares that it would have passed this Act, and each provision, section, subsection, sentence, clause, phrase, or word, and all constitutional applications of this Act, irrespective of the fact that any provision, section, subsection, sentence, clause, phrase, or word, or applications of this Act, were to be declared unconstitutional.

SECTION 4. This Act takes effect September 1, 2025.