WASHINGTON – U.S. Senator Kevin Cramer (R-ND), a member of the Senate Banking Committee, joined a letter led by Banking Committee Ranking Member Pat Toomey (R-PA) and signed by all Republican committee members to Federal Reserve Chair Jerome Powell urging him to refrain from using its regulatory authority to further environmental objectives, which is beyond the scope of its mission.
“We question both the purpose and efficacy of climate-related banking regulation and scenario analysis, especially because the Federal Reserve lacks jurisdiction over and expertise in environmental matters,” wrote the members. “This effort is not grounded in science or economics, but is instead a self-fulfilling prophesy: claim there are financial risks with energy exploration and other disfavored investments then use the levers of government—via the unelected bureaucracy—to ban or limit those activities.”
“Due diligence requires banks to consider all applicable and reasonable risks in their lending activities, but they should not stop doing business with entire sectors of the economy simply to manage political and reputational risk. Rather, they should review applications for services on a case-by-case basis, looking for standard metrics like creditworthiness and financial viability,” the members continued.
Read the full letter here.
Earlier this month Senator Cramer introduced the Fair Access to Banking Act, a bill backed by 32 senators to prevent discrimination by banks and financial service providers against constitutionally-protected industries and law-abiding businesses. This bill protects fair access to financial services and ensures providers operate in a safe and case-by-case manner.
