COLUMBIA, S.C. — The biggest banks and payment companies doing business in South Carolina will soon need a real financial reason before they shut a customer out. The Guarantee Banking Act, signed by Gov. Henry McMaster on June 30, takes effect Dec. 30.
The law, Act 257, applies only to the giants of the industry. It reaches banks holding more than $100 billion in assets and card companies, payment networks, processors and gateways whose yearly transaction volume topped $100 billion last year, along with their parent and affiliate companies.
Those firms may not refuse, close or limit checking and savings accounts, money transfers or loans because of a customer’s protected religious practice, protected speech or associations, or any standard that is not quantitative, impartial and tied to risk. The law specifically calls out decisions based on the business sector a customer works in. Covered institutions also cannot coordinate with others to do what the act forbids.
Protection extends to individuals, businesses and nonprofits that live in South Carolina or are based here. A customer who is turned away or cut off has 90 days to ask for a written explanation, and the company must reply within 30 days. A vague answer pointing to internal policy or a credit score alone does not satisfy the law.
Banks keep plenty of room to say no. Good-faith decisions tied to fraud, criminal activity, defaults, inactive accounts, legal limits or ordinary profit and safety concerns remain allowed, and temporary freezes during a fraud review or identity check do not count. A breach of the law can be handled under state rules against unfair and deceptive business conduct, and the attorney general may seek additional remedies.
The bill moved through the General Assembly with little opposition, clearing the House 109-0 on second reading and the Senate 38-2 before final House approval 99-0 in June.
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