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Over the years, organizations and individuals engage in financial blacklisting for vested interests in politics.
The Office of Comptroller of the Currency, a bureau under the US Department of Treasury, plans to set a new rule to counteract financial blacklisting.
The rule is still drafted and it aims to prevent discrimination of major banks against individuals based on reasons not related to finances, such as politics. If the rule is finalized and established, it can put an end to the financial blacklisting done by companies and individuals.
Proposed US regulation would prevent financial services blacklisting for non-financial reasonshttps://t.co/WydGPf5r8g— Reclaim The Net (@RecIaimTheNet) December 14, 2020
As a whole, banks have more control in the gun sector as compared to the government. Any bank can make a case easy even without going through much trouble.
Andrew Ross Sorkin of the New York Times posted an article in 2018 entitled, “How Banks Could Control Gun Sales if Washington Won’t”, proving how the banks use power to manipulate certain factors in the economy.
He remarked, “What if the finance industry — credit card companies like Visa, Mastercard, and American Express; credit card processors like First Data; and banks like JPMorgan Chase JPM and Wells Fargo— were to effectively set new rules for the sales of guns in America?”
In its 2018 Business Standards Report, Wells Fargo stated, “Our credit exposure to private prison companies has significantly decreased and is expected to continue to decline, and we are not actively marketing to that sector.”
Data gathered by Refinitiv reveals that JP Morgan has hundreds of billions worth of loan deals across different sectors.
Wow! Big news here. JPMorgan Chase & Co has decided to stop financing private operators of prisons & detention centers https://t.co/0vINRw6HwR— Lauren-Brooke (L.B.) Eisen (@lbeisen) March 5, 2019
In 2019, the biggest bank in the US followed suit and stopped financing private detention centers and prisons whose services were used by the Immigration and Customs Enforcement (ICE).
Another example of vested political interest is when Democrat Rep. Alexandria Ocasio-Cortez pressured banks to suspend investments for the Dakota Access Pipeline.
The proposed OCC rules state that banks should “…not deny any person a financial service the bank offers except to the extent justified by such person’s quantified and documented failure to meet quantitative, impartial risk-based standards established in advance by the covered bank.”
The OCC rule highlights how activists politically influence and even pressure financial institutions to withdraw funding and services from certain industries.
Some areas show a high-level risk but it is the banks’ responsibility to implement risk management instead of rejecting customers because they fall under certain categories. Instead of applying an avoidance tactic, banks need to ensure that customers under high-risk categories are placed under a higher level of risk management.
Leftist groups and individuals push for widespread discrimination among banks. The new federal rule is expected to bring an end to years of financial manipulation and political influence.