AN ACT TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "GUARANTEE BANKING ACT" BY ADDING CHAPTER 47 TO TITLE 34 SO AS TO PROVIDE FOR FAIRNESS AND TRANSPARENCY IN BANKING.
H5538, the “Guarantee Banking Act,” would add a new chapter to Title 34 of the South Carolina Code to regulate how large financial institutions provide banking and payment services to customers in the state. The bill is aimed at preventing banks and major payment companies from denying, restricting, or terminating services based on a customer’s religion, speech, expressive activity, association, or other non-quantitative and non-risk-based factors. It also prohibits coordinated efforts to pressure institutions into taking such actions and requires institutions, when requested, to provide specific written reasons for adverse actions within a set timeframe.
The bill defines covered institutions narrowly, applying only to banks with more than $100 billion in assets and payment processors or networks that processed more than $100 billion in transactions in the prior year, along with their affiliates. It also creates exceptions for good-faith business decisions, legal compliance, safety and soundness concerns, account inactivity or delinquency, and services the institution does not offer. Violations are treated as unfair or deceptive acts or practices, giving the Attorney General enforcement authority, and the act would take effect six months after gubernatorial approval.
If enacted, the bill would create new state-law protections against what it defines as discriminatory banking practices and would impose disclosure and anti-coordination requirements on the largest banks and payment networks operating in South Carolina. It would also limit state and local governments from imposing substantially similar restrictions or penalties on financial institutions not covered by the chapter, unless required by other law. The measure would therefore add a new consumer- and business-facing regulatory framework in Title 34, while expressly preserving compliance with federal law and existing federal adverse-action notice regimes such as the Equal Credit Opportunity Act and the Fair Credit Reporting Act.
The voting history suggests broad support in the House, where the bill passed 105-0, indicating strong bipartisan agreement at that stage. In the Senate, the bill advanced on second reading by a wide margin, 38-2, but then a motion to lay the bill on the table failed 17-23, showing that while the measure retained substantial support, there was also meaningful resistance. No committee transcripts were provided, so the available record shows overall favorable sentiment with some Senate-level opposition or procedural pushback.
The main points of contention appear to be the bill’s regulation of how financial institutions assess risk and choose customers, especially where decisions may intersect with religion, political speech, advocacy, or business-sector considerations. Supporters likely view the bill as a fairness and transparency measure preventing “debanking” or viewpoint-based discrimination, while opponents may be concerned that it intrudes on private institutions’ risk management, compliance discretion, and business judgment. The narrow targeting of very large banks and payment companies, along with the bill’s exceptions for profitability, legal compliance, and safety and soundness, suggests an effort to address those concerns, but the Senate table motion indicates that some lawmakers still had reservations about the scope or policy approach.