Recent news reports have suggested that large banks are being pressured to withhold access to credit and services to customers and companies that are operating businesses that comply with federal and state law (and, in some cases, are engaged in Constitutionally-protected activities), but are politically disfavored by those on the left. Newly-elected Democrat Socialist Alexandria Ocasio-Cortez, for example, is reportedly pressuring banks into pushing her socialist policies on some of the country’s most divisive issues: climate change, gun violence, and immigration.
As Chairman of the Senate Banking Committee, Senator Mike Crapo, R-Idaho, sent letters to the CEOs of eight banks, including Bank of America, Wells Fargo, Morgan Stanley and J.P. Morgan Chase & Co., reminding them that they should continue to provide credit and services to customers and companies that comply with federal and state law, and should not seek to replace legislators and policymakers.
“Banks serve customers who are geographically and politically diverse, and it is wrong to use essential banking services as a way to choke off such services to lawful, creditworthy businesses,” wrote Crapo. “Large banks, which receive significant forms of government support and benefits, should continue to provide credit and services to customers and companies that comply with federal and state law and should not seek to replace legislators and policymakers. Business lending decisions should be based on creditworthiness, rather than politics or political pressure.”
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As we and others reported recently, Chase told some prominent Trump supporters that their business is no longer welcome and subsequently closed their accounts. No specific reason for the action was given in the reports.
Crapo has challenged banks in the past for issuing guidelines that could effectively cut off financial services to law-abiding firearm manufacturers, retailers and firearms purchasers if they do not comply with the bank’s firearms preferences.
Last May, the New York Times reported:
In April, Bank of America said it would no longer lend money to manufacturers of military-inspired firearms that civilians can use, such as AR-15-style rifles. A bank executive said the policy was intended to help reduce mass shootings.
BlackRock, the world’s largest asset manager, said it would begin offering a new line of investment funds that do not include producers of firearms or retailers that sell them, cutting off a potential avenue of financing for gun makers and retailers.
Gun advocates have viewed the moves as a direct assault on the industry.
Senator Michael D. Crapo, the Idaho Republican who heads the banking committee, sent blistering letters in late April to the top executives at Citigroup and Bank of America, accusing them of using their market power to manage social policy. He told them not to go any further and warned them against developing ways to monitor gun transactions through their payments systems, a move that gun advocates view as a dangerous step toward using data to block law-abiding customers from buying guns.
Crapo also fought against “Operation Choke Point,” an Obama-era initiative in which Federal agencies pressured banks to “choke-off” politically disfavored industries’ access to payment systems and banking services. The issue continues to be a major focus of ongoing Banking Committee oversight efforts.
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