The Nebraska Bankers Association is raising concerns about legislation that would prohibit state treasurers from depositing public funds with financial institutions that could use the money to further social or political goals.
Bill 67, introduced in January by conservative lawmakers, is part of a pushback in Republican-led state governments across the country against so-called “wakeful capitalism,” a term that encompasses new environmental, social and governance policies in many banks and other large corporations. Critics worry that efforts by lenders to address climate change and promote diversity and equality will translate into politically biased credit decisions.
Robert Hallstrom, general counsel for the bankers association, said LB 67 is “too vague” and that the trade group is lobbying supporters of the bill, as well as the Nebraska state treasurer, who supports the legislation, to ensure that the wording of the bill matches its “initial intent”.
“We are working to make sure that [LB 67] returns to the intent that the state treasurer remain neutral with respect to exerting any influence or direction on financial institutions with respect to their banking activities or practices,” Hallstrom said during an interview.
“Aside from the fact that state funds are a part of our deposit base, we cannot identify that state money was used specifically for one purpose or another,” Hallstrom said.
During a public hearing Monday to discuss the legislation, Nebraska Sen. Julie Slama, a Republican who proposed LB 67, said the bill is meant to protect against future state treasurers using public funds “to further political or social agendas.” “, according to Nebraska Examiner Article.
John Murante, the Republican state treasurer for Nebraska, expressed his support for the passage of LB 67 and in November wrote a opinion piece for the National Review describing the adoption of ESG policies by banks as an attempt to “achieve through the back door goals that even our own legislation has not been able to achieve.”
In December, Nebraska State Attorney General Doug Peterson issued a report warning against ESG investing and lending strategies as “a threat to our democratic form of government.”
This week’s political swing over ESG in Nebraska is playing out alongside the conservative backlash in other state governments.
Republican lawmakers in Wyoming introduced House Bill 210 this month to clamp down on “financial institution discrimination.” The legislation requires the state treasurer to list lenders that refuse to do business with energy companies operating in the state.
In Kentucky, the state’s attorney general, Daniel Cameron, was sued in November by the Kentucky Bankers Association, which claims the state’s top attorney overstepped legal limitations and violated banks’ First Amendment rights by forcing Submit documents, communications, and information related to your environmental lending practices.
Overall, more than a dozen Republican-led states have launched investigations into alleged violations of antitrust and consumer laws related to ESG investment practices at six banks that are members of the United Nations Net-Zero Banking Alliance.
