Left-wing, open border activists have obviously been unsuccessful in their effort to abolish U.S. Immigration and Customs Enforcement through legislative or regulatory means, so they’ve resorted to pressuring banks to do it for them.
The latest tactic being utilized by the hardcore Left is attempting to limit the ability of industries it doesn’t like to enjoy banking privileges.
In this case, the latest targets are companies that operate facilities on behalf of ICE.
This backdoor campaign to abolish ICE will not only make it harder for the United States to secure its borders — it is simply not how policy is meant to be made in this country.
Last week, Republican Sens. Marco Rubio of Florida, Kevin Cramer of North Dakota, Tom Cotton of Arkansas, Marsha Blackburn of Tennessee, and Ted Cruz of Texas filed the Financial Defense of Independent Contractors Act, which aims to withdraw taxpayer-funded guarantees for banks that deny service to federal contractors.
“Some of our nation’s largest banks have decided to cater to the radical Left’s ‘woke’ agenda by abusing their systemic influence in our economy to deprive law-abiding federal contractors of banking services critical to their business,” Rubio said. “Banks have a right to deny funds to certain businesses, but they shouldn’t enjoy taxpayer-provided guarantees if they are undermining the public policy of the United States.”
According to a release from Rubio’s office, the legislation would amend the Federal Deposit Insurance Act to remove Federal Deposit Insurance Corporation insurance from banks with assets over $50 billion that refuse to provide banking services to firms with an active federal contract that are otherwise creditworthy and law-abiding. If a bank violates this standard, the FDIC Board of Directors would begin the FDIC insurance termination process pursuant to the Federal Deposit Insurance Act, including a notice of intent, an FDIC board hearing, and a transition phase of up to two years.
Six major banks controlling over $7 trillion in combined assets recently announced they will stop providing deposit service to contractors who operate on behalf of ICE: Wells Fargo, Bank of America, JPMorgan Chase, BNP Paribas, Barclays, and SunTrust.
These banks are among the biggest in the country, and they are denying service to companies that provide a lawful service to the federal government under statutory authority enacted by Congress.
They receive taxpayer support through deposit guarantees for savings accounts and Federal Reserve guarantees. As large financial institutions, they control significant access to credit due to their direct lending, and their policies are often followed by smaller banks.
These five senators are not suggesting that banks cannot deny service to any business they choose. Instead, they are making the point that taxpayers should not help these banks for denying service to federal contractors.
On Jan. 29, the House Committee on Financial Services held a hearing on whether the Office of the Comptroller of the Currency is undermining the effectiveness of the Community Reinvestment Act, which protects low- and moderate-income communities’ ability to secure loans.
The law requires that financial institutions insured by the FDIC adequately meet the credit needs of the communities in which they operate — this includes all lawful large and small businesses. Unfortunately, many banks are bowing to activist pressure to sever their financial relationships with companies that don’t follow the standards of the liberal agenda.
These banks’ decision is a violation of both the Community Reinvestment Act and official Office of the Comptroller of the Currency policy.
At this hearing, several members of Congress spoke out against the decision-makers who have thus far ignored the renaissance of Operation Choke Point throughout the country. Republican Reps. Bill Posey of Florida, Roger Williams of Texas, and David Kustoff of Tennessee frankly addressed the bad banking practices that are withholding loans from lawful companies that the Left doesn’t like.
Unsurprisingly, the OCC Comptroller Joseph Otting repeatedly responded with the weak answer: “We believe the banking industry should serve all legal businesses in America. However, we do leave that up to the boards and management of those financial institutions to make those decisions.”
Banks should not be able to decide who market winners and losers are. Banks are required by law to offer equal lending opportunities to all lawful companies. It’s imperative that the Trump administration stand up to biased banking and hold big banks accountable for bad behavior. If we don’t hold them accountable now, there’s no limit to the industries the Left might target next.
Today, the targets are ICE contractors. Tomorrow, it may be gun manufacturers, oil companies, or churches.
Where does it end?
Matt Mackowiak is president of Potomac Strategy Group LLC. He’s a Republican consultant, a Bush administration and Bush-Cheney reelection campaign veteran and former press secretary to two U.S. senators.
