Sunday, August 7, 2022

How GOP-led states are targeting Wall Street with ‘anti-awakening’ laws

Republican-led states have made a policy push to punish Wall Street for taking stances on gun control, climate change, diversity and other social issues, a warning to companies that engage in fractious social debate. Huh.

Abortion rights are poised to be the next frontier.

17 Conservative-led states penalizing such company policies have at least 44 bills or new laws, compared to about a dozen such measures in 2021, according to a Reuters analysis of state legislative agendas, public documents and statements. Huh.

While some individual moves have been reported, the scale and speed at which such “anti-wake” state laws and policies are moving and the challenges they pose to Wall Street companies are detailed here for the first time.

The Merriam-Webster Dictionary defines “wake up” as being aware and actively attentive to issues of racial and social justice, but it is often used by conservatives to denigrate progressive policies. The term has gained traction as America has become more politically polarized on issues ranging from racial justice and LGBTQ rights to the environment and COVID-19 vaccines.

Reuters counts bills passed in 2021 and 2022 and state laws passed, though some state officials are also using executive powers to punish Wall Street.

America has become more politically polarized on issues ranging from racial justice and LGBTQ rights to the environment and COVID-19 vaccines.
Reuters

The escalating sanctions show how America’s culture wars are posing new risks for some of the most high-profile American companies, prompting them to take stances on hot-button issues with a potential backlash from conservative policymakers, including workers and investors. pressure is being forced to balance.

This year West Virginia and Arkansas stopped using BlackRock for some services, due to its climate stance, according to West Virginia Republican Treasurer Riley Moore and Arkansas media reports.

In Texas, JPMorgan Chase, Bank of America and Goldman Sachs have been pulled from the municipal bond market due to laws passed last year that “exclude” firms from doing new business with the state or “against the firearms industry”. discrimination”.

In many cases, the measures target multiple companies, limiting their ability to conduct state business. But financial institutions have been the primary target because they play a vital role in the economy and early stances were taken by many on issues such as fossil fuels and firearms financing.

    JPMorgan Chase Headquarters
In Texas, JPMorgan Chase has been delinked from the municipal bond market.
AFP/GETTY IMAGES

Republicans say the policies of such companies deprive legitimate businesses of capital.

“They are using the power of their capital to push their ideas and ideology onto the rest of us,” Moore said. He led a law passed in March asking banks to “boycott” fossil fuel companies by denying business and has rallied officials in 16 other states to promise to adopt similar policies.

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After the Supreme Court overturned federal abortion rights last month after several major financial companies took steps to cover travel costs for workers seeking abortions, Republicans called on Wall Street to approve a “wake up” stance. pushed off.

Republican Texas lawmaker Brisco Cain said he plans legislation to outlaw such coverage and prohibit companies that block it from receiving any business or contract within the state of Texas.

“No corporation doing business in Texas will be allowed to subsidize abortion or abortion travel,” Cain told Reuters in an email.

no exclusion

According to interviews with more than a dozen industry sources, bank lobbyists and lawyers, the new restrictions would make it difficult for financial firms to conduct a variety of state businesses from bond underwriting to managing state funds, depository accounts and government credit cards. Will go

Public procurement data suggests such contracts could be worth several million dollars.

For example, JPMorgan underwritten $3.2 billion worth of Texas Muni bonds last year, compared to $210 million so far this year, Refinitiv data shows. Bank of America, which took out $3.7 billion in Texas Muni bonds last year, has done nothing this year.

Meanwhile, some smaller firms, including Ramirez & Company and Loop Capital Markets, have jumped more than 10 places so far this year in the Texas Muni Bond Market Bookrunner rankings based on deal values.

abortion rights protesters
A Republican Texas lawmaker said he plans to outlaw companies that cover travel costs for employees seeking abortions.
Reuters

To be sure, some Democratic-led states are also looking to tilt the scales. Washington state issued a “climate resilience fee” for institutions that fund fossil fuel projects. California is considering a bill that would block the nation’s largest pension plans from investing in fossil fuel companies.

But Democrat-led states are not taking as many punitive measures, according to the review and sources.

“We’re going to see a lot of these methods on one side or the other of the coin,” said John Crossley, a partner at K&L Gates who focuses on energy. “It’s going to make it more difficult for people to operate in these markets.”

Spokespersons for the aforementioned financial firms declined to comment or did not respond to requests for comment.

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Financial firms say they aim to provide comprehensive health benefits. He also argues that government sanctions will increase costs for Americans, and he disputes the characterization of his policies as boycotts.

For example, BlackRock, the world’s largest asset manager and a frequent target of Republican attacks, has told Texas officials that although it has joined various efforts to cut greenhouse gas emissions, it supports fossil fuel companies. .

blackrock logo
For example, this year West Virginia and Arkansas stopped using BlackRock for some services, because of its climate stance.
Reuters

“The economy and the financial system are best served when banks of all sizes can make their own banking and lending decisions about how to best meet the needs of their communities based on their business models and risk tolerance,” said senior vice president Joseph Pig said. American Bankers Association.

anti wake push

The review shows that “anti-voke” measures are gaining ground not only in traditional conservative strongholds like Texas and Kentucky but also in so-called purple states — whose voters swing Democratic or Republican — such as Arizona and Ohio.

Issues targeting such measures are also growing rapidly.

Guns and Energy were the focus of nearly a dozen state laws and bills last year and at least 30 legislative measures this year.

But there were also more than a dozen bills this year related to social and other issues, including “divisive concepts” like the critical race theory – an academic theory that racial bias is baked into US laws and institutions – mandatory COVID-19 vaccines, or Reuters analysis shows that the use of “social credit scores”.

The latter is a theory that companies can take into account of an individual’s political leanings when providing services and setting pricing.

For example, in April, Florida made it illegal for companies to require training, allowing employees to feel “guilt” or “pain” because of past actions by members of the same race. Unveiling the bill, Florida Governor Ron DeSantis marked Bank of America as the only company that conducts such “woke” training.

A spokesperson for the bank said the materials were offered to hundreds of companies by a non-profit and were not part of the bank’s training materials.

While the reviewed measures do not target corporate abortion policies, Cain said he expects other Republican-led states to push for business restrictions on companies with such policies.

Nation World News Desk
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