With just a week remaining in President Donald Trump’s administration, his Office of the Controller of the Currency (within the U.S. Treasury) promulgated a “Fair Access to Financial Services” rule on Jan. 13 which has angered Wall Street and, no doubt, annoyed Windsor Castle and the Old Lady of Threadneedle Street. The rule, if enforced, would appear to rule “green finance” out of order in the United States banking system, in spite of the Network of Central Banks and Supervisors for Greening of the Financial System which the Federal Reserve just joined after four years of being scared out of it by the President.
The rule prohibits banks – although not using this term — from “redlining” companies or funds because they invest either in energy technologies, in agriculture or ranching, or in arms and armaments. No bank, under the rule, may decide or threaten not to lend to or invest in a group or class of companies or funds, as for example, coal and oil and engineering companies have been threatened out of fossil fuel power projects in African and South Asian countries under Mark Carney’s sundry central bank committees and “taxonomies.” Rather, the bank must provide the OCC with criteria and data supporting each case of “redlining” of each single company, and show that those criteria are financial, not climate, social or “governance.”
Wall Street is very unhappy at this OCC action, as evidenced in the complaints in three consecutive days’ lead stories, Jan. 14-16, on the website of American Banker the ABA’s publication. Wall Street’s TV channel, CNBC, reported Jan. 14 that the rule “is not just opposed by the largest banks, but faced widespread opposition from legal scholars and environmental, social and governance experts.” Right up to Prince Charles, no doubt. If the Federal Reserve and the biggest Wall Street banks cannot coerce oil and coal companies into building big wind farms instead, farmer cooperatives into swearing off fertilizers and pesticides, ranchers into cutting their livestock herds, Joe Biden’s rejoining the Paris Climate Accord might be a hollow gesture.
