More On: America’s Banks
America’s Banks Civil War
Progressives have used the banking sector to enforce their agenda.
The ideological battle over America's banks has heated up with the recent passage of a West Virginia law that penalizes banks for discriminating against fossil-fuel companies. The ideological battle over America's banks has been simmering since 2020, when Alaska threatened to retaliate over the financial boycott of arctic drilling.
Progressives have successfully pushed JPMorgan Chase, Citibank, Bank of America, Wells Fargo, and other major banks into left-wing activism, shunning industries such as oil and gas producers and gun manufacturers, and fighting conservative state laws on issues such as abortion, with the help of the Biden administration. Red states, on the other hand, are increasingly banding together to fight back.
West Virginia passed Senate Bill 262, which allows the state treasurer to bar any bank that discriminates against fossil fuel companies from receiving state contracts for underwriting municipal bonds, payments services, and other business, on March 30.
"Banks have the right to continue their boycott of the fossil-fuel business," West Virginia State Treasurer Riley Moore stated. "We have the freedom to refuse to do business with them as well."
Moore claims that progressives have had remarkable success so far in imposing their agenda through the banking sector. "They may have fired the first shots, but we will, in my opinion, be the ones who fire the last."
He stated, "This is a tremendous existential threat to us." "It would be disastrous for our economy" if fossil-fuel corporations went out of business. We're in a war for survival."
Since November 2021, West Virginia has been one of 17 states that have banded together to reject municipal contracts to banks that discriminate against energy producers. These states control about $700 billion in assets and hefty banking fees as a group.
"The progressive wing has done a better job of influencing huge organizations to view things their way," says Missouri State Treasurer Scott Fitzpatrick. Conservatives have been reticent to participate in this debate, but we've reached a point where we must. If corporations are only under pressure from one direction, they will act in that manner."
"We're not going down without a fight," Fitzpatrick added. "[Banks] are putting in place policies that, at least in our state, a great majority of people oppose."
Beyond the imposition of municipal levies, states have other instruments. Banks are "acting as an illegal cartel that is cooperating to dry off finance to responsible American energy providers" by pursuing an united "net-zero" climate agenda, according to Jason Isaac of the Texas Public Policy Institute. It's possible that they'll be sued for antitrust violations as a result of this.
This viewpoint is supported by a white paper published by Boyden Gray & Associates, a law firm based in Washington, D.C. It reads:
Progressive organizations are engaging in coordinated campaigns to defund and constrain industries deemed politically incorrect … Lenders who steer money away from politically disfavored industries—such as fossil fuel exploration and production—may be colluding on group boycotts of energy producers in violation of antitrust laws.
In November, Arizona Attorney General Mark Brnovich initiated an inquiry into progressive banking tactics that include "threatening and harassing enterprises if they do not agree with their left-wing agenda," as well as "inappropriate coercion and anticompetitive activity."
States are fighting back against banks that discriminate against gun producers, in addition to energy production. For this reason, JPMorgan Chase, Citigroup, and Bank of America were recently barred from participating in municipal dealings in Texas and Louisiana. Texas is the second-largest issuer in the $4 trillion municipal bond market, after only California.
Banks are "shutting out a Constitutionally protected enterprise," according to Mark Oliva of the National Shooting Sports Foundation, a gun-rights advocacy group. "This is the privatization of Operation Choke Point," an illegal operation that employed the Federal Deposit Insurance Corporation, a financial regulator, to threaten banks that lend to the gun business during the Obama administration.
"Banks are unaccountable to the public," stated Oliva. Progressives are "doing this through faceless, nameless corporate board rooms on Wall Street" rather than passing laws democratically through elected legislators.
Progressives have targeted the banking industry because it is so powerful—banks have complete control over America's savings, capital, and payment networks, allowing them to shut down businesses and individuals almost instantly. They displayed their power in February when Canadian banks froze the personal accounts of protesting truckers and their allies, cutting them off from their savings and capacity to buy food or pay bills.
According to Josh Blackman, a law professor at South Texas College of Law, banking services are "at the heart of everything." He mentions conservative groups that are unable to use payment platforms such as WePay (owned by JPMorgan), Shopify, or PayPal as an example. "You literally starve that company to death once you make it impossible to acquire, sell, and transact money."
JPMorgan Chase's subsidiary WePay abruptly cut off payment services to a conservative conference organized by Defense of Liberty in November, prompting Fitzpatrick to threaten that Missouri would stop doing business with the bank over the practice. The conference featured speakers such as Candace Owens, U.S. Sen. Roy Blunt, and U.S. Rep. Jason Smith. WePay was unable to identify any policy violations that resulted in the unexpected shutdown, forcing the event to be canceled.
Banks have taken sides in the abortion debate, with Citigroup offering to pay for travel and lodging for any Texas employee who went outside the state to avoid Texas' recently passed fetal-heartbeat law, which allows private citizens to sue those who provide or aid abortions after a fetal heartbeat is detected.
"In order to virtue signal that they support these various causes, I believe these companies will risk civil liability." Citigroup is taking a significant financial risk, according to Blackman. Any private citizen in Texas can sue Citigroup if its employees accept the offer, according to the Texas heartbeat law. Last week, state Rep. Briscoe Cain vowed to introduce legislation prohibiting Citigroup from underwriting municipal bonds in Texas in retaliation to the bank's abortion policy.
The Biden administration has backed progressive bank activity wholeheartedly. The Office of the Comptroller of the Currency (OCC) issued guidelines under the Trump administration to compel banks to lend solely on the basis of economic reasons, not ideology. At the same time, Trump's Labor Department demanded that state pension funds invest solely in order to earn returns for their retirees, rather than on ideological grounds.
Both of these policies have been repealed by the Biden administration, paving the stage for the politicization of America's financial sector. Furthermore, John Kerry, Biden's climate envoy, has been pressuring banks to increase their commitment to climate-friendly banking.
"It's a complete sea change in terms of what the Biden Administration is aiming to achieve," Fitzpatrick said, "using their regulatory power to compel banks and pension funds to adopt ESG [Environmental, Social, and Governance] policies."
"It truly goes beyond what these agencies and the federal government are supposed to be doing," he said. "As a result, financial institutions are discriminating against entire industries."
Banks, on the other hand, don't appear to have needed much urging from the government. The banking industry has battled Trump's OCC regulation that discourages ideological lending, as well as state legislation that penalizes them for progressive advocacy.
"In West Virginia, we had the Bankers Association come out against the [fossil-fuel-protection] law," Moore added. "We were able to overcome what turned out to be a really significant battle."
Banks are denying that they discriminate in lending while fighting laws to prevent it, according to Bette Grande, state-government-relations manager at the Heartland Institute and a former North Dakota legislator. Their mission statements and public statements tout their commitment to fighting climate change and supporting gun control, she said.
"They're now in a position where, in order to compete for business," Fitzpatrick said, "they have to walk back their words or say what they said meant something else."
"They can lie all they want," Grande remarked, "but they're doing it on their website." Why are they so enraged that politicians are calling them out on it if they weren't [discriminating]?"
Apart from discrimination, banks are also involved in the collection and analysis of personal data. The Biden administration's attempt to have the IRS investigate every banking transaction over $600, as well as Bank of America's warrantless data-mining of customers' personal bank accounts following the riot in Washington, D.C. on January 6, 2021, raise concerns about bank customers' privacy rights.
Personal accounts were frozen by Canadian banks to curb political criticism, according to Fitzpatrick. "I could see certain individuals in our country pushing for that page of the playbook." Simply deny opposing opinions access to their own money to silence them."
JPMorgan Chase was approached for comment on this story, but they declined. Bank of America and Citigroup did not reply to calls for comment.
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