Pushing Back Against Viewpoint-Based Discrimination By Banks

Authored by Michael Ross via RealClearMarkets,

On paper, Zulfat Suara and Steve Happ don’t have much in common.

One, a Muslim woman, immigrated to the U.S. from Nigeria in the 1990s and now serves on the Nashville City Council. The other, a Christian man, is a Memphis native with a background in software who began a ministry partnering with Ugandan non-profit charities that care for orphaned and at-risk children in 2015.

But they do have at least one thing in common: Both were canceled by large national banks with little warning and virtually no explanation.

Suara, who like Happ, is also involved in non-profit work, received a vaguely worded notice of cancelation from Regions Bank earlier this year, giving her 30 days to find a new bank. Happ’s cancelation by Bank of America came in 2023 shortly before he made a trip overseas—forcing him to scramble for solutions and delay hard-earned paychecks to Ugandans.

Happ’s notice said he was operating in the wrong “business type.” As we reported in this year’s report for our Viewpoint Diversity Score Business Index, which measures corporate respect for free speech and religious liberty, these problematic policies are present in at least 69% of the country’s largest financial institutions.

Incidents like these are a small sample of a larger trend of viewpoint-based discrimination in financial services—known as “de-banking”— which has also affected firearms and fossil fuels because of radical net zero emissions commitments and government initiatives like Operation Choke Point. It has also garnered the attention of both sides of the political aisle.

These incidents propelled Tennessee lawmakers to adopt a landmark legislative solution aimed at curbing this dangerous weaponization of the financial system. Like a similar law that recently went into effect in Florida, the legislation is a first-of-its-kind consumer protection bill that prohibits big banks from canceling customer accounts based on their constitutionally protected speech and religious exercise.

The Tennessee law applies to banks with at least $100 billion in assets—which includes both Regions and Bank of America—the latter of which has also been exposed by U.S. House oversight as working hand-in-hand with the U.S. Department of Treasury to profile as domestic terrorist threats my organization, Alliance Defending Freedom, and everyday Americans who committed the sin of shopping at Bass Pro Shops or buying “religious texts.” It should come as no surprise that this same government entity has now spoken out in opposition to these state-level attempts to protect the God-given freedoms guaranteed by the First Amendment.

In a recent letter lauded in these pages by Hispanic Leadership Fund president Mario H. Lopez, the Treasury makes a series of false assertions about Tennessee and Florida’s laws. Chief among these specious claims is that the laws prevent Treasury’s Financial Crimes Enforcement Network (FinCEN) from dealing with money launderers and terrorist threats.

There’s no need to provide a nuanced answer to this accusation. It’s simply untrue. Twenty state attorneys general recently responded to this letter and rightly observed that the standards the Treasury is attacking in the state laws are the exact same standards the Office of the Comptroller of the Currency proposed—and the Treasury did not object to—only a few years ago.

Likewise, Lopez’s reactionary appeal to free market principles fails. Banks don’t operate in a free market. ESG is avowedly anti-free market. And the market is not free if access depends on your political and religious views.

First, banks are highly regulated. But in exchange for those regulations, they benefit from a wide spectrum of government subsidies. Those include bailouts, tax credits, property tax abatements, and grants at the state and federal levels. Since 1998, for example, JPMorgan Chase has received over $1.7 trillion from American taxpayers in the form of subsidies.

Second, ESG activists, and even government regulators, are introducing non-financial and subjective factors into decision-making by classifying groups like mine as domestic terrorist threats and denying service to ministries that support orphans and widows for being the wrong “business type.” Someone should explain how these groups, or those of Christian broadcaster Lance Wallnau or U.S. Ambassador Sam Brownback, present national security threats. Of course, one of the features of the state laws is that customers like Wallnau and Ambassador Brownback can demand a written explanation from the banks.

Third, the market is not free if it does not support a free society. There are numerous antidiscrimination laws that apply specifically to financial services, from the Equal Credit Opportunity Act to state fair lending laws—because every American deserves equal access to financial services. If we allow financial services to become politicized, we undermine the democratic process and deny businesses the ability to focus on what they do best, create excellent goods and services for their customers.

The Treasury cannot profile half of America as domestic terrorists, institute Orwellian financial surveillance, and then hide behind the fig leaf of national security when the states push back.

Banks, insurance providers, and others in the financial sector need to make tangible changes to their policies to protect their customers from discrimination. States like Tennessee and Florida have a critical role to play—not only in adopting laws to ensure their citizens’ freedoms are protected but also in enforcing these laws so that no one else has to fear financial discrimination because of their religious or political beliefs.

Michael Ross is legal counsel for Alliance Defending Freedom (@ADFLegal).