Attorney General Knudsen demands answers from Wells Fargo for debanking practices

HELENA – Montana Attorney General Austin Knudsen led a coalition of 16 attorneys general in demanding answers from Wells Fargo Wednesday regarding the company’s debanking policies, which appear to extend the Biden administration’s woke agenda.

In a letter to Wells Fargo’s Chief Executive Officer Charles Scharf, Attorney General Knudsen raised concerns with the bank’s decision to debank – close the accounts of individuals or organizations it views as a risk – Republican candidates and gun industry participants. Wells Fargo has also committed to the Net-Zero Banking Alliance (NZBA), promising to align their customers’ greenhouse gas emissions with aggressive 2030 targets to align with the Biden administration’s net-zero goals.

“Wells Fargo is pushing the Biden administration’s anti-gun and anti-traditional energy policies and discriminating against customers who don’t fall in line with their political beliefs,” Attorney General Knudsen said. “As attorney general, it’s my job to protect Montanans from discriminatory business practices. I will continue to investigate and fight against any illegal actions that could impact Montana businesses and consumers.”

Wells Fargo, along with the five other largest banks in the country, are acting as economic regulators, carrying out mandates that the Biden administration has been unable to pass through the democratic process.

The NZBA requires that member banks set 2030 emissions reduction targets and submit those targets to part of the United Nations Environment Programme for review. The bank has announced targets in the oil and gas, power, automotive, steel, and aviation sectors. It must also set targets for sectors covering nearly the entire economy by the end of 2024 including agriculture, aluminum, cement, coal, iron, commercial and residential real estate, and transport.

Since the targets depend on emissions produced by clients, they necessarily lead to debanking. For example, Wells Fargo has pledged to reduce the emissions from its oil and gas clients by 26 percent by 2030 on its way to net zero by 2050. If Wells Fargo’s oil and gas clients do not reduce their absolute emissions enough for the bank to meet its goal, the bank must decide whether to condition financing on emissions reductions, and/or cut off financing to enough oil and gas companies to achieve the specified reductions.

Wells Fargo has also made public commitments that it will deny services to certain companies. For example, the bank has stated it “will not provide new direct credit, capital markets origination or corporate advisory services to, or make corporate principal investments in, clients deriving the majority of their revenues from the extraction of coal” or to “coal mining companies deriving the majority of their revenues from mountaintop removal coal operations.”

Last year, Wells Fargo abruptly cancelled a Florida gun dealer’s line of credit and sent a letter stating that “the reason(s) for this action is: Banking guidelines excludes lending to certain types of businesses.” The bank has also amended a multi-billion-dollar credit agreement with BlackRock in which Wells Fargo agreed that if the asset manager met racial quotas, then Wells Fargo would decrease the amount that it had to pay under the agreement and if the asset manager failed to meet racial quotas, then BlackRock would have to pay more to Wells Fargo.

“Wells Fargo’s conduct and commitments may implicate state unfair and deceptive acts and practices (UDAP) laws or civil rights laws. Additionally, if banks like Wells Fargo are restricting access to financial services to act as pseudo-governmental gatekeepers, then states need to revisit the current division of supervision power between state and federal regulators for the largest banks,” the attorneys general wrote. “We urge Wells Fargo to move away from the debanking policies it has embraced, as well as those it appears to be poised to embrace.”

Attorney General Knudsen asked for answers to the following questions by April 4:

1. What will Wells Fargo do if its existing clients do not reduce emissions enough for Wells Fargo to meet its emissions reduction targets? Please outline all possible courses of action and in what circumstances each course of action would be used.
2. Why did Wells Fargo debank Wex Gunworks, Lauren Witzke, and Pete D’Abrosca? Please provide all documents related to each decision and the name of an employee with knowledge of each circumstance.
3. What are the “certain types of businesses” that Wells Fargo will not lend to, as referenced in Wells Fargo’s letter to Wex Gunworks?
4. Under what circumstances does Wells Fargo put ESG-related terms in its financing contracts?
5. Does Wells Fargo agree that race or sex-based employment quotas are unlawful?
6. Why has Wells Fargo agreed to financing terms with BlackRock that incentivize BlackRock to employ a certain percentage of certain races and avoid hiring employees of other races?

Attorneys General from Arkansas, Idaho, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Hampshire, Ohio, South Carolina, Virginia, West Virginia, Utah, Wyoming also joined the effort.

Click here to read the letter.

Press release provided by Montana Department of Justice