MORGANTOWN — The bill to allow the state treasurer to put financial institutions that openly boycott fossil energy companies on a publicly available Restricted Financial Institution List continued its legislative journey on Wednesday.
House Banking and Insurance took up SB 262, revised it and passed it on to House Finance.
SB 262 allows the treasurer to put institutions on the list and to refuse to enter into a banking contract with those institutions.
As it came to the House, it required the treasurer to notify the company of the restricted status and allow the company to appeal and demonstrate it is not engaged in a boycott. The list would be updated annually. It excluded deposits made by the Investment Management Board and decisions by lenders made in the course of ordinary banking business.
House Banking did a major reorganization of the bill, committee counsel said, because it kept growing longer in each committee. The changes were made in consultation with various stakeholders.
There were three changes to the substance of the bill. One replaced the phrase “ordinary banking business” with “reasonable business purpose.” The original phrase was included to specify that a bank may deny an energy company a loan because of bad credit or some other financial, non-political reason.
The new phrase, counsel said, takes into account actions taken to conform with legal and regulatory requirements.
The second change deals with the list itself. It requires the treasurer to notify a potentially restricted bank of its status 45 days before publication of the list and gives the bank 30 days to respond.
The third change deals with the information sources the treasurer may use: publicly available information regarding financial institutions, including public statements by a company, information published or provided by nonprofit organizations, research firms, international organizations, and other state or federal governmental entities.
House Banking added two exclusions: media reports and complaints from a single energy company.
Treasurer Riley Moore did not speak at this meeting, as he did during the two Senate committee reviews of the bill. He had told the Senate that some major national lenders (including BlackRock) openly state they won’t lend to fossil-fuel companies. Energy companies fear they’re going to lose access to capital.
He said he doesn’t view the bill as affecting free speech rights of the companies; the state is free to choose who to do business with and those banks’ policies pose a clear conflict of interest. Coal and gas companies generate tax revenue, so why give banks with hostile attitudes toward West Virginia industries West Virginia tax dollars, he asked.
Moore told the Senate his office has deposits in 30 banks, and the bill might affect two.
Delegates in House Banking asked some technical and clarifying questions, but there was no debate. It passed in a voice vote with no audible votes against.
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