Three dozen lawmakers are pushing the Trump administration to get tough on banks and asset managers that restrict financing for oil drilling and coal mining, arguing they are “discriminating against America’s energy sector” and it “must be confronted.”
In a letter released Friday, the lawmakers told President Donald Trump that he should punish those lenders by blocking them from participating in federally guaranteed loan programs created in response to the coronavirus, including the Paycheck Protection Program.
“We urge you and your administration to use every administrative and regulatory tool at your disposal to prevent America’s financial institutions from discriminating against America’s energy sector while they simultaneously enjoy the benefits of federal government programs,” the 14 senators and 22 representatives wrote.
The push, led by Republican Senators Dan Sullivan of Alaska and Kevin Cramer of North Dakota, comes as major lenders adopt policies against financing some fossil fuel projects at the urging of environmentalists and Alaska natives.
Five major US banks have now ruled out financing oil projects in the Arctic, and BlackRock Inc., the world’s largest asset manager, has decided to forgo investing in coal.
Sullivan previously pressed the issue during an Oval Office event with Trump. And Cramer threatened in a tweet to press for “appropriate action” as a member of the Senate’s banking committee.
The energy sector is critical to the nation’s economic recovery and national security, but banks are unfairly picking winners and losers “in order to placate the environmental fringe,” the lawmakers told Trump. “Scoring cheap political points at the expense of American energy workers is an affront to our economic success and must be confronted.”
The lawmakers singled out BlackRock because of its coal plans and its central role in distributing credit facilities under the coronavirus stimulus law. “Its hostility toward the American energy sector is unacceptable and should be closely scrutinized,” they say.
A representative of BlackRock declined to comment. But in a January letter to clients, BlackRock emphasized its investments will always represent the preferences, timelines and objectives of its clients, including those that may prefer “traditional strategies.”
BlackRock also stressed the portfolios it manages will continue to hold investments tied to hydrocarbons amid a global transition away from fossil fuels that will take decades.
The Federal Reserve Bank of New York already said in a “frequently asked questions” document that the central bank will provide investment guidelines for coronavirus-spurred corporate credit facilities, rather than allowing investment managers to apply their own, internal guidelines.
The lawmakers put other lenders on notice, distributing copies of their letter to chief executives of Citigroup Inc., Goldman Sachs Group Inc., JP Morgan Chase & Co., Wells Fargo & Co., and Bank of America Corp.
(By Jennifer A. Dlouhy, with assistance from Annie Massa)