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WASHINGTON – At a Senate Banking Committee hearing, U.S. Senator Kevin Cramer (R-ND) pressed U.S. Department of the Treasury Secretary Janet Yellen on whether it is appropriate for the federal government to apply political pressure on financial institutions which invest in energy development. 

“You have made addressing climate change one of the central points of your time at Treasury, and it has been reported President Biden’s Climate Czar John Kerry has encouraged banks and other investment institutions to form a net-zero banking alliance. He’s also urged banks to provide as much support for alternative energy projects as possible, seemingly at the expense of more traditional energy projects, possibly even forcing financial institutions to put political and social considerations ahead of sound business practices. That would be a violation of their fiduciary responsibilities to their shareholders,”said Senator Cramer. “In light of weak unemployment numbers, do you think it’s a good idea for private businesses to be forced by a government official to make decisions about where they should or should not put their money, jeopardizing jobs in our energy and other sectors of the economy that are legal commerce industries and businesses?”

Secretary Yellen defended the Biden Administration’s efforts.

“It is appropriate for the government, and the private sector as well, to focus on how we can mitigate the risks to encourage banks and financial institutions and lenders more generally to think about the potential adverse impact of investments that they may make and, perhaps more importantly, to understand that eventually we are committed to going to net zero emissions by 2050 and that can affect the returns that they receive on investments. I don’t think that’s inappropriate,” said Secretary Yellen.

Senator Cramer concluded his questioning of Secretary Yellen by emphasizing the importance of reliable energy and grid resiliency, especially in states like North Dakota with extreme weather patterns, and the harm that would be caused to his constituents if they did not have access to the kinds of energy sources the Biden Administration is pressuring financial providers to quit working with. Earlier this month, Senator Cramer introduced the Fair Access to Banking Act , which would protect fair access to financial services and ensure providers operate in a safe and sound manner. It builds off the Trump Administration’s Fair Access Rule and the Freedom Financing Act which Senator Cramer introduced last Congress. Learn more here.

Senator Cramer also spoke during the hearing to Federal Reserve Chair Jerome Powell about community banks beginning to come under leverage ratio stress.

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