H 5538

South Carolina General Assembly
126th Session, 2025-2026
Bill 5538
Indicates Matter Stricken
Indicates New Matter
(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)
Indicates Matter Stricken
Indicates New Matter
Committee Amendment Adopted and Amended
May 13, 2026
H. 5538
Introduced by Reps. Pope, Herbkersman, G. M.
Smith, Hartz, W. Newton, Jordan, Ligon, Oremus, Neese, Taylor, Hiott, Cromer,
Gilreath, Morgan, Lastinger, Huff, Burns, Chumley, Beach, D. Mitchell, McCabe,
Pedalino, Vaughan, Kilmartin, Gibson and Govan
S. Printed 5/13/26--S.  [SEC
5/14/2026 9:34 AM]
Read the first time April 28, 2026
________
A bill
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.
    Amend Title To Conform
Be it enacted by the
General Assembly of the State of South Carolina:
SECTION 1.  This act may be cited as the "Guarantee Banking Act."
SECTION 2.  Title 34 of the S.C. Code is amended by adding:
CHAPTER 47
Guarantee Banking
    Section
34-47-10.  As used in this chapter:
       (1)
"Adverse action" means a decision by a financial institution to decline to
provide full and equal access in the provision of covered financial services
and includes refusing to provide, terminating, or restricting covered financial
services. "Adverse action" does not include the temporary suspension or
restriction of an account pending an internal investigation, fraud review, or
verification of identity.
       (2)
"Discriminate in the provision of covered financial services" means taking an
adverse action against a customer on the basis of one of the following
criteria:
  (a)
any person'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;
  (b)
any person'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. This section does not prohibit a financial
institution from declining to provide financial services to a person that is
engaged in fraud, criminal conduct, incitement to unlawful actions, or that
creates obscenity or another form of expression that is not protected by the
Constitution of South Carolina or the United States Constitution;
  (c)
any factor if it is not a quantitative, impartial, and risk-based standard,
including any such factor related to the person's business sector;
  (d)
animus towards a person based on the factors in subitem (a), (b), or (c); and
  (e)
a desire to, directly or indirectly, obtain a gain from or avoid a loss imposed
on the covered financial institution by any person for the purpose of
encouraging the covered financial institution to take an adverse action based
on any of the factors in subitem (a), (b), or (c).
       (3)(a) "Financial institution" means:
  (i)
a bank that has total assets over one hundred billion dollars; or
  (ii)
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.
  (b)
A financial institution includes any parent company, holding company,
affiliate, or subsidiary company, even if that company is also a financial
institution.
       (4)(a) "Covered financial service" means:
  (i)
depository accounts including, but not limited to, checking accounts, savings
accounts, or NOW accounts;
  (ii)
money transmission including, but not limited to, checking, payment services,
ACH, or credit card networks; or
  (iii) credit including, but not
limited to, personal loans, mortgages, business loans, or credit cards.
  (b)
"Covered financial service" does not include the provision of insurance or the
underwriting of or an investment in a security as defined by federal law.
       (5)
"Person" means any individual, partnership, association, joint stock company,
trust, corporation, nonprofit organization, or other business or legal entity
that is a resident of this State or has its principal place of business in this
State.
    Section
34-47-20.  (A) If a financial
institution takes an adverse action against a person, that person may request a
statement of specific reasons within ninety days after receiving notice of the
refusal to provide service, restriction of service, or termination of service.
    (B)
The person may request the statement from a customer service representative or
designated account representative by phone, U.S. mail, or electronic mail.
    (C)
When a person requests a statement pursuant to subsections (A) and (B), then
that person must specifically describe the alleged adverse action, including
which provision of Section 34-47-10(2) is the basis for the alleged adverse
action.
    (D)
Unless otherwise prohibited or otherwise required by federal law, the financial
institution shall transmit the statement of specific reasons via U.S. mail or
electronic mail, if known to the financial institution, within thirty days of
receiving the person's request.
    (E)
The statement must be specific and include a description of the principal
reason for the adverse action. 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. If any criteria listed in Section 34-47-10(2) factored into the
institution's decision to take an adverse action, it must be described in the
statement.
    (F) If
the financial institution provides an adverse action statement to the customer
consistent with its obligations under the Equal Credit Opportunity Act, 15
U.S.C. Section 1691 et. seq., and implementing regulations or the Fair Credit
Reporting Act, 15 U.S.C. Section 1681 et. seq., and implementing regulations,
that statement satisfies the requirements of this subsection, provided that if
any criteria listed in Section 34-47-10(2) factored into the institution's
decision to take an adverse action, it must be described in the statement, a
supplement to the statement, or a separate statement that is provided to the
customer contemporaneously with the Equal Credit Opportunity Act or Fair Credit
Reporting Act adverse action statement.
    (G)
Nothing in this section shall be construed to require a covered entity to
provide notice or take any action that would conflict with applicable federal
law, regulation, or supervisory guidance.
    Section
34-47-30.  A financial institution may not:
       (1)
discriminate in the provision of financial services to a person;
       (2)
agree, conspire, or coordinate, including through any intermediary or third
party, with another person, or group of persons, to engage in activity
prohibited pursuant to item (1); or
       (3)
fail to provide or provide false or intentionally misleading information in the
statement required pursuant to Section 34-47-20.
    Section
34-47-40.  It is not a violation of this chapter for
a financial institution to take any of the following actions, provided that the
action was made in good faith and not motivated by animus or a desire to
discriminate in the provision of covered financial services against a person:
       (1)
a change in the terms of an account expressly agreed to by a customer;
       (2)
any action or forbearance relating to an account taken in connection with
inactivity, default, or delinquency as to that account;
       (3)
a refusal to provide services because applicable federal or state law prohibits
the covered financial institution from providing the service requested;
       (4)
a refusal to provide a service because the covered financial institution does
not offer the type of service requested;
       (5)
a decision based solely on any of the following valid business factors, if made
in an impartial manner and in good faith:
  (a)
maximizing profitability or shareholder value, provided this determination is
not based on a desire to obtain a benefit or avoid a harm imposed by another
person because the covered financial institution served a customer;
  (b)
complying with legitimate legal or regulatory requirements; or
  (c)
maintaining the safety and soundness of a covered financial institution or its
employees.
    Section
34-47-50.  Any violation of this chapter is an unfair or deceptive act or
practice and, in addition to the rights and remedies provided in this chapter,
the Attorney General may pursue any other remedies provided for by law.
    Section
34-47-80.  The State and any political subdivision thereof may not impose any
restriction, obligation, or penalty identical or substantially similar to what
is contained in this chapter, whether by regulation, rule, guidance, or
enforcement, on financial institutions not covered by this chapter, unless the
State or any political subdivision thereof is required to impose such
restriction, obligation, or penalty under federal or state law.
    Section
34-47-90.  This chapter must 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, the Constitution of South
Carolina, and state law.
SECTION 3.  This act takes effect six months
after the signature by the Governor.
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This web page was last updated on May 14, 2026 at 09:35 AM