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Republicans urge Trump to bar banks from shunning fossil fuel loans, investments

CommoditiesMay 08, 2020 03:50PM ET
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© Reuters.

By Valerie Volcovici

WASHINGTON (Reuters) - A group of Republican lawmakers from energy-producing states on Friday called on President Donald Trump to prevent banks from halting loans and investments with companies that produce oil and other fossil fuels while they have access to federal assistance programs during the COVID-19 pandemic.

"Wall Street's big banks ... should not be able to reap the benefits of participating in federally guaranteed loan

programs laid out in the CARES Act, such as the Paycheck Protection Program or the trillion dollar Federal Reserve facility lending programs, while simultaneously targeting American energy companies and workers," the lawmakers wrote in the letter.

Democratic lawmakers like Massachusetts Senator Elizabeth Warren, who want and economic recovery featuring investments in conservation and alternative energy to fight climate change, have been calling on Treasury Secretary Steve Mnuchin to bar oil and gas companies from accessing loans through the Main Street facility.

Many energy companies have been struggling to stave off bankruptcy due to a meltdown in global crude prices after governments around the world issued stay-at-home orders that obliterated demand for motor and jet fuel.

For years, environmental activists have pressured banks and financial firms to drop support of fossil fuel companies.

The Republican lawmakers, led by North Dakota Senator Kevin Cramer, Alaska Senator Dan Sullivan, and Representatives Don Young of Alaska and Liz Cheney of Wyoming, accused some major U.S. financial institutions of halting fossil fuel investments to "placate the environmental fringe."

They specifically cited investment giant BlackRock (NYSE:BLK), which has been given a central role in the COVID-19 corporate recovery.

BlackRock announced in January it was divesting from coal burned in power plants and its global head of sustainable investing is Brian Deese, who was a White House climate official under former President Barack Obama, a Democrat.

"Considering BlackRock’s central role as a Federal Reserve

fiduciary for the distribution of CARES Act credit facilities, its hostility towards the American energy sector is unacceptable and should be closely scrutinized," the lawmakers wrote.

BlackRock did not immediately respond to a request for comment.

The Republican lawmakers urged Trump to use "every administrative and regulatory tool" to prevent those institutions from participating in federal lending programs while "discriminating" against investments in parts of the energy sector but did not specify what measures could be taken.

Energy Secretary Dan Brouillette said in a recent interview that he and Mnuchin also planned to work with U.S. regulators and the banking industry to ensure financial institutions don’t discriminate against oil drillers when choosing who to provide credit to.

 

Republicans urge Trump to bar banks from shunning fossil fuel loans, investments
 

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Comments (4)
Amit Patel
Amit Patel May 09, 2020 11:28AM ET
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Old money is starting to crumble. Woot!
Me comment
Me comment May 09, 2020 9:16AM ET
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More GOP demands for their big donors to get more support.
Mark Maxwell
MaxAnalysis May 09, 2020 12:10AM ET
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socialism
Alexander Abgar
Alex2022 May 08, 2020 4:04PM ET
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Of course the republican represent those who pay for them.
 
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