Americans are best served when banks can pursue a free market approach to make lending and investment decisions, and imposing regulations on banks to drive other policy goals—or to regulate other industries—can be harmful to economic growth and to banks’ ability to best serve customers’ needs, Mason Bolay, SVP at First Bank and Trust in Perry, Oklahoma, told members of the House Ways and Means Committee today.
The committee held a hearing on protecting consumers from “ESG activism,” during which Chairman Jason Smith (R-Mo.) alleged that environmental, social and governance practices in the finance sector threaten Americans’ retirement savings. Ranking Member Richard Neal (D-Mass.) countered that the criticism of ESG was a “manufactured crisis.” In prepared remarks, Bolay, one of five witnesses at the hearing, said his bank and most banks are neither pro-ESG nor anti-ESG. “We are pro-free market and pro-consumer,” he said.
“Just as standardized or one-size-fits-all policies have repeatedly demonstrated their ineffectiveness in promoting economic growth and sustainability, efforts to define and steer lending and investment for or against ESG factors are also destined to be economically harmful,” Bolay said. “The governance of banking institutions should remain focused on the risks they manage, and be tailored to account for their size, complexity and the specific norms of the regions in which they operate. Attempts to employ banking regulations as a means of indirectly regulating other industries, whether to discourage or compel lending and investment, are both unsuitable and detrimental to the economy, consumers and the principles of a free market.”