HB418 Alabama 2025 Session

Summary

Primary Sponsor

Jamie KielRepresentative

Republican

Session

2025 Regular Session

Title

Financial Institutions and Insurers; using social credit score to discriminate prohibited; violations of insurers an unfair trade practice; fines, penalties and remedies authorized

Summary

The bill would prohibit financial institutions and insurers from using a defined 'social credit score' or biased nonquantitative factors to discriminate in providing services, with enforcement, penalties, and remedies.

What This Bill Does

It defines 'social credit score' and restricts its use by banks and insurers. It bans discrimination based on social, political, or religious factors and requires transparency when denying services. It allows a religious purpose exemption and sets up enforcement by the Alabama State Banking Department and the Alabama Department of Insurance, plus a complaint process with damages and possible civil actions. It also imposes a certification requirement for state contracts and has an effective date of October 1, 2025.

Who It Affects

• Financial institutions and insurers operating in Alabama, who would be prohibited from using social credit scores or biased factors when deciding who gets financial services and must follow disclosure and complaint rules.
• Consumers and residents of Alabama who use financial services, as they would gain protections against discrimination, have access to explanations for denied services, and may seek damages or injunctive relief if violated.

Key Provisions

• Definition of 'social credit score' and related terms, including factors like religion, speech, firearm ownership, greenhouse gas disclosures, diversity/gender audits, and other nonquantitative criteria.
• Prohibition on using a social credit score or nonquantitative factors to discriminate in providing financial services by banks, insurers, and payment-related entities.
• Religious purpose exemption allowing certain service determinations to be based on religious grounds, with specified limits.
• Requirement that quantitative risk-based standards be impartial, clearly defined in advance, and publicly disclosed.
• Enforcement provisions: violations enforced by the Alabama State Banking Department (for banks) and Alabama Department of Insurance (for insurers), with damages (actual or at least $10,000 per violation, whichever is greater; up to $30,000 or three times damages if willful), filing fees up to $50, and a complaint-process including timelines and remedies.
• State contracting provision: entities must certify they will not violate the act to do business with the state, with immediate contract termination and two-year ineligibility for violators.
• Additional complaint process details: 90-day filing window, 60-day department decision window, and potential civil action for damages and injunctive relief if no agency action.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Businesses & Financial Institutions