Senator Kevin Cramer and Representative Andy Barr: Protect citizens from the cancellation of culture in finance
In a nod to this growing political pressure, some financial firms have announced that they will not do business with certain legal – but politically targeted – firms. Last fall, JP Morgan Chase said it would deny financial services to coal producers, and Bank of America launched a politically motivated effort to achieve net zero greenhouse gas emissions from its financing activities. by 2050, an effort directly targeting reliable US energy producers. .
These efforts are impacting coal, oil and gas producers, the gun and ammunition industry, and many other law-abiding businesses that employ millions of people and supply our citizens. the goods and services they need. These decisions are not based on the creditworthiness or financial strength of the client. They are motivated by open pressure from far-left environmental progressives like John Kerry, anti-gun groups funded by people like Michael Bloomberg, liberal activists who use tools like proxy voting at shareholder meetings. and the whims of business leaders.
The culture of cancellation is spreading into the world of finance, forcing lenders to consider the reputational risk of doing business with a company that is no longer in fashion with the boisterous liberal elite. Congress can and must take action to combat this. Large financial service providers are able to play such a vital role in the economy in part because their deposit insurance is supported by the federal government and paid for by the taxpayer. This gives us the right to make sure they are operating in a safe and healthy manner and to take action if they are not. Lending decisions should be based on fully objective and risk-based underwriting standards. They should not be dependent on a company conforming to the politically correct standards of the day, which threaten jobs and undermine the viability of entire industries on the sole basis of the awakened opinions of the privileged few.
Operation Choke Point, orchestrated by the Obama administration, aimed to cut businesses off legally by restricting their access to banking services. Members of Congress were right to oppose this blatant disregard for the rule of law and abuse of power. Unfortunately, political pressure is reaffirming today, and some banks are complacent. American industries are arbitrarily denied access to capital out of partisan pettiness, and workers will pay the price.
The Trump administration has recognized this problem and has taken action. In January, Acting Currency Comptroller Brian Brooks finalized the Fair Access Rule, which requires banks to provide fair access to financial services on the basis of risk-based measures. Under the rule, covered banks would not be able to inject political or public relations considerations into their lending decisions, or commit to avoiding an entire class of customers altogether. Rather, they would be required to base their lending decisions on the creditworthiness of the borrower.
This rule would have prevented the culture of canceling finance and ensured that our financial industry operates in a healthy manner. But soon after he took office, the Biden administration blocked him.
That’s why we are partnering with Congress to lead the Fair Access to Banking Act, a bill to codify the fair access rule and ensure fair access to financial services for lawful and legally compliant businesses in under federal law, regardless of policy. A difference of political opinion is not a valid reason for denying a company fair access to capital, yet it is what banks and financial institutions do. Our bill builds on the OCC’s Fair Access to Financial Services rule and makes it clear that unjustified discrimination against entire sectors will not be tolerated.
Now is the time to fight against the politicization of access to capital. The Biden administration has made it clear that it intends to use the full powers of financial regulators to tackle unrelated social goals and carry out its progressive political agenda.
Greening the financial system under the guise of oversight of safety and soundness is not just a thinly veiled effort to appease radical activists, it threatens jobs and economic recovery amid one of the most major health and economic crises of the century.
Left-wing politicians, radical anti-gun activists and politically motivated financial regulators should not be allowed to intimidate lenders into choosing which companies should be able to operate legally and which should not. Congress has the constitutional power to make new laws and amend existing laws. But there is a law that even Congress cannot change. It is the law of supply and demand, which in a free market determines which businesses succeed and which fail, as opposed to the views of the culture elite nullified.
Our bill is not about politics. It’s about protecting basic American principles and their equal application to all businesses – from oil companies and private prisons to payday lenders and gun dealers. In America, the customer is king, not the bank, and certainly not the political class. It is time for Congress to affirm that access to financial services must be tied to the creditworthiness of candidates, regardless of their perceived political leanings.
Kevin Cramer, a Republican, represents North Dakota in the US Senate. Andy Barr, a Republican, represents Kentucky in the United States House.