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bank of america
Wall Street Banks Accused of Trying to Sabotage Key Consumer Protection Rule
"The CFPB must stop this ploy by the biggest banks to keep us trapped under their thumbs."
Nov 15, 2024
Consumer advocates applauded last month as the Consumer Financial Protection Bureau finalized a rule aimed at making it easier for people to switch financial institutions if they're unhappy with a bank's service, without the bank retaining their personal data—but on Thursday, more than a dozen groups warned the CFPB that major Wall Street firms are trying to stop Americans from benefiting from the rule.
Several advocacy groups, led by the Demand Progress Education Fund, wrote to CFPB director Rohit Chopra warning that major banks—including JP Morgan Chase, Bank of America, Citi, TD Bank, and Wells Fargo—sit on the board of the Financial Data Exchange (FDX), which has applied to the bureau for standard-setting body (SSB) status, which would give it authority over what is commonly known as the "open banking rule."
Standard-setting authority for the banks would present a major conflict of interest, said the groups.
The banks are also on the board of the Bank Policy Institute, which promptly filed what the consumer advocates called a "frivolous lawsuit" to block the open banking rule when it was introduced last month, claiming it will keep banks from protecting customer data.
At a panel discussion this week, Bank of America CEO Brian Moynihan also said the open banking rule, by requiring financial firms to unlock a consumer's financial data and transfer it to another provider for free, would cause "chaos" and amplify concerns over fraud.
"The American people are fed up with Wall Street controlling every aspect of their lives and the open banking rule is an opportunity to give all of us some financial freedom."
The groups wrote on Thursday that big banks want to continue to "maintain their dominance by making it unduly difficult for consumers to switch institutions."
"The presence of these organizations on both the FDX and BPI boards undermines the credibility of FDX and presents various concerns relating to conflict of interest, interlocking directorate, and antitrust law," they wrote.
Upon introducing the finalized rule last month, Chopra said the action would "give people more power to get better rates and service on bank accounts, credit cards, and more" and help those who are "stuck in financial products with lousy rates and service."
The coalition of consumer advocacy groups—including Public Citizen, the American Economic Liberties Project, and Americans for Financial Reform—urged Chopra to reject FDX's application for standard-setting authority so long as the banks remain on its board.
“It would be a flagrant conflict of interest for the same banks who are suing to block the open banking rule because it threatens their market dominance to also be in charge of implementing it," said Demand Progress Education Fund corporate power director Emily Peterson-Cassin. "The American people are fed up with Wall Street controlling every aspect of their lives and the open banking rule is an opportunity to give all of us some financial freedom. The CFPB must stop this ploy by the biggest banks to keep us trapped under their thumbs."
The groups called the open banking rule "a historic step forward for the cause of giving consumers true freedom intheir financial lives."
"For this reason, it is imperative that SSB status not be granted to an organization whose board members are, either directly or through a trade association they are participating in, suing the CFPB to stop the rules from taking effect, particularly when such members may be ethically conflicted from such dual participation," said the groups. "By rejecting SSB status for FDX or any other organization with similar conflicts of interest pertaining to Section 1033, the CFPB will help prevent big banks from sabotaging open banking rules."
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Big Banks Have Funded Climate Crisis With Nearly $7 Trillion Since Paris Agreement
"Banks that profit from climate chaos invent new greenwash every year, but we have the receipts that show how much money they put into fossil fuels," said one report author.
May 13, 2024
The world's 60 biggest banks funded fossil fuels to the tune of $6.9 trillion in the eight years following the Paris agreement.
That's the conclusion of the 15th annual Banking on Climate Chaos report, which was published Monday and also found that the financial institutions lavished $705 billion on oil, gas, and coal in 2023—the hottest year on record.
"Financiers and investors of fossil fuels continue to light the flame of the climate crisis," Tom BK Goldtooth, report co-author and executive director of the Indigenous Environmental Network, said in a statement. "Paired with generations of colonialism, the fossil fuel industry and banking institutions' investment in false solutions create unlivable conditions for all living relatives and humanity on Mother Earth."
U.S. financial giants JPMorgan Chase, Citigroup, and Bank of America topped the "dirty dozen" list of the banks that gave the most to fossil fuels since 2016, at $430.9 billion, $396.3 billion, and $333.2 billion respectively. In 2023, U.S. banks provided 30% of total fossil fuel finance, the largest share of any country. JPMorgan also topped the 2023 list at $40.88 billion, with Japanese bank Mizuho Financial overtaking the No. 2 spot with $37.04 billion, and Bank of America remaining in third place with $33.68 billion.
"The science shows that over half of fossil fuels in existing fields and mines must stay underground to limit global warming to 1.5°C, and our Big Oil Reality Check analysis finds that none of the major oil and gas companies we analyze plan to do anything even close to what is needed to hold global warming to 1.5°C," report-co-author David Tong, the global industry campaign manager at Oil Change International, said in a statement. "By injecting a staggering $70[5] billion into fossil fuel financing in 2023 alone, the world's largest banks fund the climate chaos fossil fuel companies wreck on communities worldwide."
The report also tracks how much the financial institutions spent on companies that had fossil fuel expansion plans, according to the Global Oil and Gas Exit List and the Global Coal Exit List. The banks spent $3.3 trillion since 2016 and $347.5 billion in 2023 alone on these companies, or nearly half of total expenditures. Report co-author April Merleaux, research and policy manager at Rainforest Action Network, called the 2023 expansion finance figure "dangerous and inconsistent with real climate commitments."
Overall, Citibank has spent the most on fossil fuel expansion since 2016 at $204 billion, while JPMorgan was the top funder of expansion in 2023 with $19.3 billion.
"As this report is worth nothing if it doesn't turn into action, we call on the banks to finally become fossil free banks, and on the wider climate justice movement to use this data to mobilize for a fossil free banking world."
The researchers also looked at what fossil fuel companies and activities the banks were financing. All told, they considered funding to 4,228 companies. Clients with major expansion plans in 2023 included the pipeline companies Enbridge, TC Energy Corp, and Sempra as well as NextDecade Corp and Rio Grande Valley LNG, which are developing new liquefied natural gas (LNG) export capacity.
Fossil fuel financing did decrease in 2023, down from $778.7 billion in 2022.
"The trend of decreased financing from traditional banks to fossil fuel companies is good news, tempered by the reality that financing for fossil fuel expansion should be zero," the report authors wrote. "But there is little evidence that the decline is driven by voluntary commitments by the banks, especially given the policy rollbacks among major banks."
Indeed, in 2023, Bank of America rolled back commitments to not fund Arctic drilling, thermal coal, or coal-fired plants. Instead, the report authors suggested the downturn in finance was due to external economic and geopolitical factors.
"Unless banks take action to rule out finance for such clients, the decline may not be permanent," they warned.
When it came to the funding of individual high-risk fossil fuel activities, funding for overall expansion, fracking, tar sands, coal- and gas-power plants, and Amazon, Arctic, and deepwater oil and gas all declined. At the same time, funding for metallurgical coal, coal mining, and methane LNG all increased, with LNG funding rising from $116 billion in 2022 to $121 billion in 2023.
"In a year with record climate impacts, I am shocked to see financing for any category of fossil fuels increase. And yet in 2023 this report shows a big increase in financing to companies developing methane gas terminals and related infrastructure," Merleaux said. "Banks should be listening to those on the frontlines and stepping away from these projects."
This year the report—which is a collaboration between Rainforest Action Network; BankTrack; the Center for Energy, Ecology, and Development; Indigenous Environmental Network; Oil Change International; Reclaim Finance; Sierra Club; and Urgewald— features updated methodology that primary sources revealing the role of banks in corporate financial deals. The banks were given a chance to review the data and respond.
"Wall Street's top concern is its profit. Our top concerns are the climate and human rights. Banks that profit from climate chaos invent new greenwash every year, but we have the receipts that show how much money they put into fossil fuels," Merleaux said. "Our new methodology uncovers previously unreported details on banks' support for fossil fuels and gives campaigners new tools to hold them accountable."
Accountability is the report's main goal, according to co-author Diogo Silva, who leads the banks and climate campaign at BankTrack.
"As this report is worth nothing if it doesn't turn into action, we call on the banks to finally become fossil free banks, and on the wider climate justice movement to use this data to mobilize for a fossil free banking world," Silva said. "Later might just be too late. Fossil banks, no thanks!"
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Our Financial System Is a Suicide Machine
Last week, Bank of America engaged in perhaps the single most irresponsible about-face of the climate era.
Feb 07, 2024
Bank of America has its roots in California. Founded in Los Angeles in 1923, it was acquired by a San Francisco bank, which took the name in 1930—and over time it has grown to become the world’s second-largest bank by deposits, second only to New York-based Chase.
I tell you this for two reasons. One, California is, as of this writing, being absolutely battered by an “atmospheric river” that has knocked out power to hundreds of thousands and caused mudslides on high ground along the Pacific Coast. As Andrew Dessler pointed out yesterday, the physics are pretty simple: “A warmer planet has more water vapor in the atmosphere. And, everything else being the same, an atmospheric river carrying more water vapor will cause more rainfall when it hits land and starts rising.”
And second, Bank of America is a proximate cause of this kind of chaos, because it refuses to stop lending for fossil fuel expansion. Indeed, last week it engaged in perhaps the single most irresponsible about-face of the climate era.
They’re far more afraid of some oil-soaked GOP state treasurer than they are of an atmospheric river bearing down on the world’s fifth largest economy.
Three years ago—in the wake of the Greta-inspired mass uprising of young people around the world—Bank of America apparently felt it had to make some gesture, so it chose a pretty easy route to demonstrate its newfound greenness. It said it would no longer lend for new coal mining or coal-fired power plants or for new oil exploration in the Arctic. These were seen to be beyond the pale because… well, they are. They represent some of the most egregious possible insults to this planet.
But last week they said, never mind. If you want some money for a new coal mine, our window is open again. If you’re an oil company that feels like searching for oil in the Arctic now that you’ve melted it, we can make a deal. As the Times reported last week
Bank of America’s change follows intensifying backlash from Republican lawmakers against corporations that consider environmental and social factors in their operations. Wall Street in particular has come under fire for what some Republicans have called “woke capitalism,” a campaign that has pulled banks into the wider culture wars.
That is to say, they’re far more afraid of some oil-soaked GOP state treasurer than they are of an atmospheric river bearing down on the world’s fifth largest economy. It’s proof, of course, that their words about climate change were just pious nonsense. They’d insisted that they understood how crucial it was to change: “Climate change is no longer a far off risk but rather a global concern with impacts that are already beginning to unfold, including increased frequency and severity of extreme weather conditions, melting glaciers, loss of sea ice, accelerated sea-level rise, and longer, more intense heatwaves and droughts.” But that was, we now understand, to be understood entirely as greenwashing, an effort to reduce the heat they were temporarily feeling.
The actual heat they could care less about. It’s not like something has happened since 2021—except the hottest year in the last 125,000, which takes us back even before the advent of money, if BofA executives can even imagine such a time.
But the only weather change they’ve noticed is political. Out with Greta et al., in with GOP politicians saying scary things. And BofA is not alone. The Bureau of Investigative Journalism reported last week that global giant HSBC, despite a solemn promise that it would stop financing new oil and gas fields, has found ways to keep
selling shares in the refining business of Saudi Aramco, one of the most aggressive expanders of oil and gas. An investor in HSBC told the Bureau of Investigative Journalism that the bank’s policy has been cleverly worded to allow it to fund some of the world’s biggest polluters while boasting about its green credentials.
An analysis of Refinitiv data by TBIJ has found that in the year since HSBC’s new policy was announced, the bank has helped raise more than $47 billion (£37 billion) for companies that are expanding the production of oil and gas, despite dire warnings from scientists that this will push the world beyond its survivable limits.
This is all just sick. The International Energy Agency said in 2021 that if we had a chance of meeting the Paris temperature targets, finance for fossil fuel expansion had to end now. But the banks, and big asset managers like BlackRock, just can’t help themselves. For short-term gain, and to protect themselves from attack by right-wing politicians, they are willing to break the back of the planet’s climate system. The unbelievable economic fallout of those decisions—the fact that the world be immensely poorer, with its prospects hugely degraded, by the resulting rise in temperature—will be the problem of some other CEO down the road; it’s hard not to see our financial system as a suicide machine.
Fighting back is hard. At places like Third Act, we’ve done loads of sit-ins and pickets, and it helps—that’s the kind of action that forced these pledges in the first place. But we need some big players on our side. We’re trying, for instance, to convince Costco to pressure its banker Citi; we need the big tech companies, too, to worry not just about about the climate impact of their phones but also about the climate impact of their money (which is far far larger).
We have some champions, of course, but they’re not as hard-hitting as their Red State counterparts. Brad Lander, comptroller of New York City, gets credit for being willing to take the banks on—last week he announced that he’d try to get them to disclose their ratio of dirty energy to clean energy lending, which would certainly be good to know.
“Despite all their talk, the big banks have made little progress in the energy finance transition over the past couple of years,” said Comptroller Lander. “As long-term investors exposed to climate risk, we can’t just take their word for it. Reporting transparently on their ratios of clean energy to fossil fuel finance is key to seeing whether or not they are living up to their net-zero commitments. Right now, they aren’t—and that must change. Our planet, our economy, and our investment portfolios are all at stake.”
All of that is true. But if the planet is at stake, then perhaps a somewhat harder shove might be required. Lander’s plan seems like a way to win slowly, which on most political issues makes sense. But unless he also has a plan to refreeze a melted Arctic, this kind of pressure seems a tad too gentlemanly.
As you can tell, this about face by BofA stings. It takes so much work to move these guys an inch, and then given half a chance they slide right back to where they were before.
Small banks seem able to make money doing decent things—here’s a nice story about a merger of local California banks where they pledged, among other things, to “refrain from any new financing of fossil fuel extraction activities, especially expansion projects that would develop and lock in dependence on new fossil fuel infrastructure, either through corporate or project-based finance, subject to compliance with banking rules and regulations.”
But the big boys? Damn them to hell, which is clearly where they’re content to send all of us.
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