UPDATED 11:14 AM PT – Monday, November 30, 2020
The Trump administration is looking to implement a new rule through the Office of the Comptroller of the Currency to keep banks from discriminating against fossil fuel companies by way of denying them finances.
This comes after an October decision where five of the six largest banks in the U.S. pledged to end financing for oil companies who look to drill in the Arctic. These banks include Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley and Wells Fargo.
The most push-back over the banks’ decision came from Republicans in states with large energy industries, while the loudest praise came from environmentalist groups and authors like 350.org co-founder Bill McKibben.
Banks are not the only ones taking an activist position on the issue. Investment groups like BlackRock are also picking and choosing whom to give loans on what many Republicans believe is a discriminatory basis. However, BlackRock CEO Larry Fink claims his company is only spending money where their investors want it to go, which he said is environmental action.
“We are responding to our client’s wishes, where they want their money to be placed,” he stated.
This proposal by the Trump administration ultimately takes the ability to be activists away from banks who, by denying funds to fossil fuel companies, are ultimately using their wealth and influence to direct U.S. energy policy even though the public never elected them to make those decisions.
What many Republicans believe this new rule will do is keep private banks from discriminating against completely law abiding companies and, perhaps, take away the ability for banks to become activists who only invest in industries or companies they agree with.
Ultimately, this even relieves pressure on the private citizen whose only issue to consider when doing business with a bank is if it’s a good financial decision for themselves and not what political issues that bank chooses to support.