Nearly two dozen state attorneys general signed onto a letter Wednesday demanding major firms that provide voting advice to corporate shareholders stop backing efforts to “debank” conservatives.
Republican Iowa Attorney General Brenna Bird led 22 other state attorneys general in sending a letter to the two companies that control 97% of the proxy advisory services market, Institutional Shareholder Service (ISS) and Glass Lewis, whose advice they say shapes “the choices and activity of businesses and ultimately the United States’ and global economy.” The letter warns them against opposing shareholder resolutions to hold financial institutions accountable for restricting services based on clients’ religious and political beliefs, noting that viewpoint discrimination comes with “legal liabilities.”
“They have advised big banks to keep quiet about why they’ve closed people’s bank accounts,” Bird told the Daily Caller News Foundation. “We’ve seen banks targeting accounts for Second Amendment groups, like the NRA, or religious groups, including Christian nonprofits.”
“They say they want transparency, but when it comes to the fact that some of the big banks are debanking conservatives or conservative causes, they don’t want that transparency,” Bird said.
Banks often use “reputational risk” or “hate speech” policies to target customers based on politics, the letter states. Bank of America canceled the accounts of Indigenous Advance, a Tennessee-based Christian nonprofit, earlier this year because it “no longer aligns with the bank’s risk tolerance,” according to the Alliance Defending Freedom.
The attorneys general are concerned ISS and Glass Lewis are opposing resolutions that seek to hold banks accountable for such instances of “politicized debanking.”
“These firms support a vast majority of left-of-center, pro-ESG shareholder proposals and effectively block proposals from conservative shareholders seeking to hold companies accountable for the anti-free speech and anti-religious behavior that ESG demands,” ADF Senior Vice President of Corporate Engagement Jeremy Tedesco told the DCNF.
Last year, shareholder resolutions on viewpoint diversity at JPMorgan Chase and PayPal received 2% or less of the vote, which the attorneys general wrote “would not have happened had [the advising firms] recommended voting for it.” They push for “more transparency,” asking ISS and Glass Lewis to provide explanations of their decision making processes.
“Investment managers should be focused on getting Americans a return on their investment, having sound pensions, not playing politics with investments,” Bird told the DCNF.
ISS and Glass Lewis did not immediately respond to requests for comment.
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