Texas Attorney General Launches Investigation into Six Major Banks for Collusion on Lending Practices

Strategic Insights -

Texas Attorney General Ken Paxton has launched an investigation into six major banks, including Bank of America, Wells Fargo, and Goldman Sachs, for potential violations of consumer protection laws. The investigation centers around the banks' participation in the Net-Zero Banking Alliance, a group of financial institutions that have committed to achieving net-zero greenhouse gas emissions by 2050. Paxton has stated that this alliance, backed by the United Nations, may be using its collective influence to starve fossil fuel-related companies of credit on national and international markets.

Key Takeaways:

  • The investigation is the third recent probe by Attorney General Paxton into companies accused of deceptive trade practices tied to Environmental, Social, and Governance (ESG) actions.
  • The six banks under investigation are Bank of America, Wells Fargo, Morgan Stanley, JPMorgan Chase, The Goldman Sachs Group, and Citigroup Inc.
  • The investigation will focus on the banks' participation in the Net-Zero Banking Alliance and potential violations of consumer protection laws.
  • Attorney General Paxton has stated that the banks' actions may be designed to bankrupt the US fossil fuel industry, and the investigation will aim to uncover the truth.
  • The banks cited for joining the Net-Zero Banking Alliance have agreed to set lending practices to reflect net-zero greenhouse gas emissions by 2050, with interim targets in 2030.
  • The investigation is the latest in a series of probes by Paxton into ESG-related actions, highlighting concerns about the potential impact of these initiatives on American industries.

Statistics:

  • Six major banks are under investigation by the Texas Attorney General: Bank of America, Wells Fargo, Morgan Stanley, JPMorgan Chase, The Goldman Sachs Group, and Citigroup Inc.
  • The banks have agreed to set lending practices reflecting net-zero greenhouse gas emissions by 2050, with interim targets in 2030.
  • The investigation is Paxton's third into companies accused of deceptive trade practices tied to ESG actions.
  • The banks under investigation have a combined market value of over $1 trillion.
  • The Net-Zero Banking Alliance has members from around the world, with the collective goal of achieving net-zero emissions by 2050.

Sources:

  • Texas Attorney General Paxton, Texas Attorney General's Office, News Releases, Paxton Launches Investigation into Six Major Banks for Collusion in Lending Practices Potentially Violate Law. (October 20, 2022).
  • Texas Attorney General's Office, CID for Bank of America (October 19, 2022).
  • Texas Attorney General's Office, CID for Citigroup Inc. (October 19, 2022).
  • Texas Attorney General's Office, CID for JPMorgan Chase & Co. (October 19, 2022).
  • Texas Attorney General's Office, CID for Morgan Stanley & Co. LLC (October 19, 2022).
  • Texas Attorney General's Office, CID for The Goldman Sachs Group, Inc. (October 19, 2022).
  • Texas Attorney General's Office, CID for Wells Fargo & Company (October 19, 2022).