The Department of Labor today dealt another blow to sustainable investing with a new rule aimed at private retirement plan fiduciaries. Incoming leadership at DOL must quickly reverse course on this rule and facilitate, rather than hinder, responsible retirement investing.
Americans for Financial Reform Education Fund signed onto a comment letter, organized by Public Citizen, opposing the OCC’s proposed rule “Fair Access to Financial Services” due to climate concerns. The letter urged the OCC to withdraw the proposal on the basis that it required banks to serve every category of high-risk business, with the express goal of increasing bank lending to risky fossil fuel companies and other polluting sectors, and without regard for strategic or reputational risk. The letter stated that the OCC lacked the legal authority to enact this proposed rule, that banks are acting prudently to exit the fossil fuel industry because of growing climate risk to the sector, and that the OCC should instead scrutinize and curb banks’ involvement with high-emission activities.
American families and businesses need an economic response from Congress and the administration that provides real job-creating stimulus, and not just another deregulatory handout to powerful financial interests.
The Treasury Secretary has the authority to drive an ambitious agenda for economic, racial, and climate justice, and to use financial regulation as an important tool of that work. As Yellen has herself noted in recent remarks, this moment of crisis has made it particularly clear that a new administration needs to not only undo the dangerous Trump administration deregulation of Wall Street, but also move well beyond the preceding status quo.
“It’s basically a way to finance state and local investment that doesn’t go through Wall Street and doesn’t leave the community and turn into a windfall for shareholders,” said Porter McConnell, the campaign director of advocacy group Take On Wall Street. “This is more about community development.”
AFREF submitted a letter to the Department of Labor urging it to withdraw a rule proposal that would impose onerous costs and process requirements on private sector retirement plans when deciding whether and how to vote on matters brought to a vote at public companies’ annual meetings. It will impose costs on retirement savers and undermine advances on corporations’ integration of environmental, social and governance factors, including those that have a material financial impact on long-term investment performance
The Proposal will impose new costs on beneficiaries, undermine American’s retirement security, and impede investment decisions that would lead to a more sustainable economy and society.
AFREF urges the Department of Labor to withdraw their proposed rule entitled “Financial Factors in Selecting Plan Investments.” It discourages fiduciaries from considering environmental, social and governmental (ESG) factors in their investments and creates burdens for investors looking to be socially conscious.
“The failure to effectively control underwriting standards is one more example of ‘heads they win, tails we lose’ support for Wall Street.”
You can view or download the letter here.