South Carolina passes bill to ban 'debanking' based on religious, political beliefs

By Ryan Foley, Christian Post Reporter Thursday, July 02, 2026

South Carolina has banned large financial institutions in the state from engaging in “debanking” amid allegations that some large banks have cut off financial services to individuals and organizations based on their political and religious beliefs.

South Carolina Republican Gov. Henry McMaster signed House Bill 5538, also known as the Guarantee Banking Act, into law Tuesday. The measure passed without opposition in the Republican-controlled South Carolina House of Representatives. Only two members of the Republican-controlled South Carolina Senate voted against it.

The legislation is scheduled to take effect at the start of the new year and prohibits financial institutions from taking actions that “discriminate in the provision of financial services to a person.”

It defines discrimination as “taking an adverse action against a customer” based on the customer’s “exercise of religion that is protected by the First Amendment to the United States Constitution, federal law, or the Constitution or laws of this state, including all aspects of religious observance and practice, as well as belief and affiliation.”

The law also defines discrimination as taking adverse action against a customer based on the customer’s “speech, expression, opinions, expressive activity, or association that is protected by the First Amendment to the United States Constitution, federal law, or the Constitution or laws of this State, including the lawful preservation of privacy regarding those activities, such as declining to disclose contributions or political activity beyond what is required by applicable state and federal law.”

Banks with more than $100 billion in total assets, as well as credit card companies and payment processing platforms, are subject to the new law. Examples of prohibited adverse actions include closing checking and savings accounts or terminating access to money transfers, loans and credit cards.

The legislation also gives customers who experience an adverse action in the form of the denial of “full and equal access in the provision of covered financial services” the right to request a written explanation within 90 days. Financial institutions must provide the statement within 30 days of receiving the request.

“A statement that the adverse action was based on the institution’s internal standards or policies or that the person failed to achieve a qualifying score on the institution’s credit scoring system is insufficient,” the legislation states.

Alliance Defending Freedom, a conservative Christian legal nonprofit, praised the “critical legislation” as a positive step forward.

“No one should be denied access to basic financial services based on their political or religious beliefs,” ADF Senior Counsel Matt Sharp said in a statement after McMaster signed House Bill 5538.

“But when big banks weaponize their control of financial services to punish those with disfavored or unpopular views, they are just as threatening to freedom as Big Brother. By enacting this bill, South Carolina joins Tennessee and Idaho in leading the charge to protect citizens, nonprofits, religious organizations and businesses from discriminatory debanking.”

"Debanking" is a term used to describe instances in which financial institutions deny individuals or organizations access to financial services because of their political or religious beliefs.

President Donald Trump signed an executive order last year directing federal banking regulators to “remove the use of reputation risk or equivalent concepts that could result in politicized or unlawful debanking, as well as any other considerations that could be used to engage in such de-banking, from their guidance documents, manuals, and other materials.”

The order directed the Small Business Administration to require financial institutions under its jurisdiction to “identify and reinstate any previous clients of the institution or any subsidiaries denied service through a politicized or unlawful debanking action.”

The executive order followed a New York Post report alleging that JPMorgan Chase and Bank of America “de-banked” Trump after the Jan. 6, 2021, U.S. Capitol riot, citing concerns that doing business with him posed a "reputational risk."

In 2024, 15 Republican attorneys general alleged in a letter that Bank of America engaged in “debanking” by closing the accounts of multiple religious groups during the previous three years. Bank of America denied targeting the organizations because of their religious beliefs.

“Religious beliefs are not a factor in any account-closing decision,” a Bank of America spokesperson told The Christian Post. “We are proud to provide banking services to nonprofit organizations affiliated with diverse faith communities throughout the United States.”

In 2022, the National Committee for Religious Freedom said Chase abruptly closed the nonprofit’s account with little explanation. The organization said Chase offered to reopen the account if it received additional information about the group’s political activities, including a list of donors who contributed more than 10% of its operating budget, a list of candidates the National Committee for Religious Freedom intended to support and the criteria it used to determine which candidates to endorse.