South Carolina is restricting when large banks and payment companies can deny financial services to businesses, aiming to prevent discrimination based on protected religious beliefs, political expression, and other nonfinancial factors while preserving sound lending decisions.
Signed into law by Gov. Henry McMaster on June 30, and going into effect on Dec 30, 2026, the Guarantee Banking Act (Act 257) applies to banks with over $100 billion in assets and payment companies processing more than $100 billion in annual transactions.
Alliance Defending Freedom, the country’s largest organization dedicated to protecting religious freedoms, commended McMaster and said by enacting this bill, South Carolina joins Tennessee and Idaho in protecting its citizens, nonprofits, religious organizations, and businesses from discriminatory debanking.
Under the new law, covered institutions must respond within 30 days and provide specific reasons for certain adverse actions when customers request an explanation within 90 days of a denial or financial restriction.
The House approved the bill unanimously with a vote of 109 to 0.
“When Trump came into office, he signed an executive order that prohibited the denial of banking services for political and religious reasons,” said S. C. Bankers Association CEO Fred L. Green III. “This mirrors that plan.”
“Although there is no evidence of this ever happening, the bill presumes this has been occurring,” he added. “This wasn’t fixing a problem that existed, but was set up in case it happened in the future. Should someone be denied, they’d need to file a complaint with the attorney general.”
According to the law, a violation of the legislation is considered an unfair or deceptive act and the State Attorney General or other competent official may pursue remedies as provided for by law. Meanwhile, the law does not imply the existing underwriting or risk procedures will change.
“Businesses now have a certainty they are being treated fairly, said State Rep. Tommy Pope, R-York. “The new law sets a guidance to larger banks and ensures they are soundly based and not infringing on private businesses' right to exist.”
“At the same time, banks will not make loans that aren’t prudent,” he said. “The law is apolitical and was only drafted in response to the potential of corporate banking discrimination.”
Pope was a primary sponsor of the new banking bill and played a major role in its creation.
Jody A. Bedenbaugh, an attorney and partner at Nelson Mullins, said the act attempts to avoid conflict with the federal Equal Credit Opportunity Act by providing that an adverse action notice complies with the requirements of the new law.
“The act goes on to require a supplement to the Equal Credit Opportunity notice if any of the prohibited criteria factored into the decision,” he said. “The additional notice could potentially conflict with the federal law.”
At the same time, Bedenbaugh said discrimination claims are not raised commonly, so the practical impact of the law could be limited.
“There is of course the notion that a company can do business (or not do business) with whomever it wants, but it cannot discriminate, which has long been the case in many contexts,” he finished.
Data compiled by Banksparency showed the median bank in South Carolina paid 1.65 percent per year on savings and money market deposits in the second quarter of 2026, compared to 1.45 percent at median U.S. banks.
In 2025, South Carolina had 1,115 retail bank branches in the summary of deposits, compared to 1,258 in 2016.
Between 2011 and 2025, 34 South Carolina banks merged into another bank, but only two new banks were opened. From 2022 to 2023, Banksparency said rising interest rates reached more depositors in the Palmetto State as the federal funds rate jumped 5.2 percentage points.
From 2000 to September 2026, 10 South Carolina banks failed, with nine of them shuttering between 2009 and 2012. Four banks failed in 2010.
Meanwhile, a compilation of FDIC summary of deposits data showed banks operating around the Palmetto State held approximately $133.56 billion in deposits across 1,165 offices as of June 30, 2026, up 2.8 percent from the previous year.
In June 2026, 44 FDIC-insured banks headquartered in South Carolina filed a call report, compared to 66 in June 2015. By total assets, three of the 44 FDIC-insured banks are under $100 million, 27 are between $100 million and $1 billion, 13 are between $1 billion to $10 billion, and one is over $10 billion.
During the second quarter of 2015, median assets of the 44 open banks was $276 million. In the second quarter of 2026, median assets reached $584 million.
The average age of the 44 open banks headquartered around the state is 91 years old.
Overall, South Carolina has 7.9 banks per million residents comprising $65.7 billion in assets and $55.5 billion in deposits.
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