The days of liberal activists pushing their agenda the old-fashioned way no longer apply.
Now, liberals are using a new tactic: Pressuring private companies into severing ties with industries the left deems unsavory.
Boycott campaigns came first, and we have seen progress in shifting corporate marketing toward a “woke” liberal agenda.
Now the activists, with the endorsement of Democratic presidential candidate Sen. Bernard Sanders of Vermont and Rep. Alexandria Ocasio-Cortez, New York Democrat, are getting even more aggressive. They’re organizing shareholder resolutions to push liberal policies in corporate board rooms, they’re pressuring governments to divest pensions from industries they don’t like and they’re demanding that banks stop financing the industries they hate.
Should they succeed, this unfortunate but effective end-run around the traditional policymaking structure will have dire consequences for our capitalist system. If banks are unwilling to work with the energy, firearms and corrections industries, that would destroy consumer choice, punish lawful companies and outsource our regulatory policy to angry online mobs.
Americans should fight back against these discriminatory banking policies — and the financial institutions themselves must resist them.
The Trump administration has recognized this threat.
“Operation Choke Point,” a government-backed effort to impose banking discrimination, was killed by the Trump administration.
In 2013, the Obama administration launched “Operation Choke Point,” a secretive program to starve “unsavory” industries of resources by pressuring banks not to lend to them.
The initiative, led by the Department of Justice, the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau, was created to “choke off’ the oxygen [money] needed for these industries to survive.”
Targeted industries at the time included gun stores, ammunition shops and short-term lenders.
The program was problematic for a number of reasons — most notably that it deprived legal industries of their right to contract with other legal private companies. But a key concern among critics of Operation Choke Point is the arbitrary way in which the federal government wished to designate the industries to “choke off” from funding.
Under the guise of “ending fraud,” the Obama administration set the stage for using the financial system to discriminate against politically disfavored industries.
In 2017, the Trump administration ended Operation Choke Point.
In a letter to then-House Judiciary Committee Chairman Bob Goodlatte, Assistant Attorney General Stephen Boyd stated, “We share your view that law-abiding businesses should not be targeted simply for operating in an industry that a particular administration might disfavor.”
Unfortunately, in Washington, no bad idea ever truly dies. Activists have built upon the Obama administration’s plan by building a pressure campaign to achieve the goals of Operation Choke Point.
Real Money Moves is an activist coalition created to put pressure on banks to stop lending to companies in industries they don’t like.
The coalition includes Hollywood celebrities, feminist activists and athletes including Amy Schumer, Alyssa Milano, Gloria Steinem and the cast of “Orange is the New Black” to put star power behind their anti-capitalist message.
The campaign targets what the activists call “extractive industries,” including fossil fuels and private corrections.
Specifically, they have had success pressuring big banks, including JPMorgan Chase and Wells Fargo, into cutting ties with the private corrections industry.
In addition to moral problems, banking discrimination is expressly forbidden by the federal government. The Office of the Comptroller of the Currency states as official policy as to how its regulators should oversee banks: “The agencies will not tolerate lending discrimination in any form.”
What is the politicization of banking and lending if not discriminating against industries disfavored by the left?
There are serious consequences to this movement.
The general principle of allowing banks to discriminate against lawful industries is obviously problematic.
Worse, as we saw under the Obama administration, the list always starts small and mushrooms into something bigger.
Operation Choke Point began as an effort to root out fraudulent activity, but quickly expanded to hit industries under the guise of “reputation risk,” attacking everything from gun companies’ access to lending to porn stars’ bank accounts.
When we outsource policy to an angry mob of celebrities and Twitter users, where does it end?
Sen. Ted Cruz, Texas Republican, hit the nail on the head in opposition to this movement, saying, “We have seen in recent months and years, for example, some big banks trying to use their economic power to defund politically disfavored groups.”
This speaks to the real root cause of the pro-banking discrimination effort: Punish any industry we don’t like.
Attacks on specific industries have real world impacts on the lives of Americans.
Second Amendment supporters may see their ability to arm themselves compromised as firearms companies go out of business.
Our southern border, already in chaos, will only get worse if we lose the ability to detain migrants who are in the U.S. illegally because private facilities are forced to shutter.
Oil and natural gas pipelines give us secure access to affordable energy. What will happen to gasoline prices if pipeline manufacturers are shut out of the banking system?
Banking discrimination is wrong. These companies are operating legally. Americans must fight this hijacking of the free market in the name of a left-wing policy agenda.
Too many banks have rolled over and complied with activist harassment. The list of targeted industries will only expand as the activists see success.
• Matt Mackowiak is president of Austin, Texas, and Washington-based Potomac Strategy Group. He’s a Republican consultant, a Bush administration and Bush-Cheney reelection campaign veteran and former press secretary to two U.S. senators.
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