Letter: Protecting citizens from cancel culture in finance
Cancel culture is extending into the world of finance, forcing lenders to consider the reputational risk of doing business with a firm that is out of fashion with the vocal liberal elite. Congress can and should take action to combat this.
Cancel culture is spiraling out of control in the United States. Once treasured and protected American rights and ideals like freedom of speech, religion, capitalism, and the free marketplace of ideas are increasingly under siege. In finance, it threatens the survival of lawfully operating businesses in the United States and even the ability of Americans to exercise constitutionally guaranteed rights.
In a nod to this increasing political pressure, some financial firms have announced they will not do business with certain legal -- but politically targeted -- companies. Last fall, JP Morgan Chase declared it would refuse financial services to coal producers, and Bank of America began a politically-motivated effort to achieve net-zero greenhouse gas emissions from its financing activities by 2050, an effort directly targeting producers of reliable American energy.
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These efforts impact coal, oil and gas producers, the firearm and ammunition industry, as well as many other law-abiding businesses which employ millions and supply our citizens with goods and services they need. These decisions are not based on the creditworthiness or financial soundness of the customer. They are driven by open pressure from far-left environmental progressives like John Kerry, anti-gun groups financed by people like Michael Bloomberg, liberal activists who use tools like proxy voting at shareholder meetings, and the whims of corporate leaders.
Cancel culture is extending into the world of finance, forcing lenders to consider the reputational risk of doing business with a firm that is out of fashion with the vocal liberal elite. Congress can and should take action to combat this. Large financial service providers are able to play such an essential role in the economy in part because their insurance on deposits is backed by the federal government and paid for by the taxpayer. That gives us the right to ensure they operate in a safe and sound manner and to take action if they are not. Lending decisions should be dependent on wholly objective, risk-based underwriting standards. They should not be dependent on whether a business is in conformity with the politically correct standards of the day, which threaten jobs and compromise the viability of entire industries based solely on the woke opinions of a select few.
Operation Choke Point, orchestrated by the Obama administration, sought to cut off legally operating businesses by restricting their access to banking services. Members of Congress were right to balk at this blatant disregard for the rule of law and abuse of power. Unfortunately, political pressure is being reasserted today, and some banks are obliging. American industries are arbitrarily being denied access to capital simply because of partisan pettiness, and workers are going to pay the price.
The Trump administration recognized this problem and took action. In January, Acting Comptroller of the Currency Brian Brooks finalized the Fair Access Rule, which required banks to provide equitable access to financial services on risk-based metrics. Under the rule, covered banks would not be able to inject political or public relations considerations into their lending decisions, or engage in total avoidance of an entire category of customers. They would instead be required to base lending decisions on the creditworthiness of the borrower.
This rule would have kept cancel culture out of finance and ensured our financial industry operates in a sound manner. But shortly after taking office, the Biden administration blocked it.
That is why we are teaming up in Congress to lead the Fair Access to Banking Act, a bill to codify the Fair Access Rule and guarantee fair access to financial services for lawful and legally compliant businesses under federal law, regardless of politics. A difference in political views is not a valid reason to deny a business fair access to capital, yet that is what banks and financial institutions are doing. Our bill builds on the OCC’s Fair Access to Financial Services rule and makes it clear unjustifiably discriminating against entire industries will not be tolerated.
Now is the time to push back against the politicization of access to capital. The Biden administration has made it clear it intends to leverage the full powers of financial regulators to tackle unrelated social goals and carry out its progressive political agenda.
The greening of the financial system under the guise of safety and soundness supervision is not only a thinly veiled effort to placate radical activists, it threatens jobs and economic recovery amidst one of the greatest health and economic crises in a century.
Left-wing politicians, radical anti-gun activists and politically motivated financial regulators should not be allowed to intimidate lenders into picking which businesses should be able to operate legally and which should not. Congress has the constitutional authority to make new laws and change existing laws. But there is one law even Congress cannot change. This is the law of supply and demand, which in a free market determines which businesses succeed and which fail, as opposed to the opinions of the cancel culture elite.
Our bill is not about politics. It is about protecting fundamental American principles and its equal application to all businesses -- from oil companies and private prisons to payday lenders and firearms dealers. In America, the customer is king, not the bank, and certainly not the political class. It is time Congress affirms that access to financial services should be tied to the creditworthiness of applicants, regardless of their perceived political leanings.
Cramer, R-N.D., serves in the U.S. Senate, and Barr, R-Ky., serves in the U.S. House of Representatives.
This column does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.