AMAC Exclusive – By Shane Harris
The New York City Banking Commission voted late last week to halt deposits at two banks and prohibit deposits at three others that “failed to submit required plans demonstrating their efforts to root out discrimination” – in other words, for not being woke and punitive enough. The move could be the first sign of a leftist counterpunch to the conservative movement’s battle against “environmental, social, governance” (ESG) investing and other forms of politicized banking.
The commission – comprised of NYC Comptroller Brad Lander, Mayor Eric Adams, and Finance Commissioner Preston Niblack – said in a press release last Thursday that the city government would freeze its deposits at Capital One and Key Bank and bar any deposits at Finance Bank, PNC Bank, or Wells Fargo.
“Banks seeking to do business with New York City must demonstrate that they will be responsible managers of public funds and responsible actors in our communities,” the release said. “Unfortunately, despite several opportunities to do so, five banks failed to comply with the New York City Banking Commission’s designation process – leaving us to conclude that they are not taking meaningful actions to combat discrimination in their operations and are not responsible stewards of public dollars.”
The news comes after Lander, a self-described socialist who says he has spent his “whole career engaged in progressive organizing for social justice,” announced in February that any banks doing business with the city must “provide details on their commitment to combating lending and employment discrimination.” Notably, neither Lander nor any other government official has provided any concrete evidence that banks are discriminating against New Yorkers.
Rooting out alleged “systemic racism” in banking has become a major part of the left’s broader push in recent years to wokeify all of corporate America. Even as many banks have fully embraced the leftist “equity” agenda – including subjecting their employees to radical “racial re-education” programming and creating race-based lending programs – Democrats like Lander, Adams, and Niblack still insist that it’s not enough.
It doesn’t even appear as if the failure to submit an anti-discrimination plan was any kind of intentional act of rebellion against the woke establishment on the part of the banks involved.
Key Bank called the controversy a “misunderstanding” and said it “look[s] forward to clarifying this issue with the Banking Commission.” The other four banks have also previously demonstrated their fealty to woke dogma.
Instead, it seems more likely that the affected banks simply failed to keep up with the ever-moving goalpost of liberal virtue signaling, either through misunderstanding the commission’s convoluted demands or believing that their existing “equity” commitments were already sufficient to meet the requirements.
Nonetheless, the conundrum the banks now find themselves in is a problem of their own creation. They are the ones who first allowed the left to infuse its toxic ideology in their institutions, and now they have no one but themselves to blame for the inevitable consequences of that decision. Eventually, the left’s cancel culture machine comes for everyone.
The actions by the New York City Banking Commission may also be the first sign of a broader effort by the left to re-assert its dominance over the banking industry after some significant victories by conservatives to de-politicize the sector in recent years.
The most prominent example of this has been moves by some Republican state attorneys general to withdraw public funds from investment banks like BlackRock, Vanguard, and Wells Fargo that have embraced the left’s ESG investing model. In total, red states have divested some $4.3 billion from just BlackRock in 2023 alone.
Republican lawmakers in Congress and at the state level have also threatened action against banks for their woke policies. In May, Rep. Jim Jordan (R-OH) announced a House inquiry into whether or not ESG policies may violate federal antitrust laws. The Texas state legislature has subpoenaed BlackRock CEO Larry Fink for “using Texans’ money to force a narrow political agenda.”
As a result, some banks have begun to back off of their ESG stance. Last December, Vanguard announced it was pulling out of an industry-wide initiative ostensibly aimed at combatting climate change known as Net Zero Asset Managers. Despite pressure from noisy climate activists, most big banks are also continuing to invest in fossil fuels companies.
In response to these clearly effective efforts on the part of conservatives, many on the left have attempted to flip the script and accuse Republicans of politicizing banks. However, as the leaders of the anti-ESG movement have made clear, the goal is to move banks back into a position of political neutrality where they act in the best fiduciary interests of their customers and investors – as the law demands – rather than pushing an openly left- or right-wing agenda.
Democrats, however, have a vested interest in keeping banks political so that they can continue to weaponize them against conservatives. With conservatives gaining ground, liberal politicians may look to the actions taken by the New York City Banking Commission as an example of how to force banks that show signs of straying from woke orthodoxy back in line.
Shane Harris is a writer and political consultant from Southwest Ohio.
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