HomeEnvironment & Climate NewsNorth Dakota Financial Institutions Oppose Anti-ESG Bill
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North Dakota Financial Institutions Oppose Anti-ESG Bill

By Kim Jarrett

(The Center Square) – North Dakota’s financial institutions oppose a bill that would prevent financial institutions from denying service to customers using environmental, social and governance standards, also known as ESG.

Rep. Anna Novak, R-Hazen, said House Bill 1283 would keep banks and insurance companies from discriminating against specific industries unless they are told ESG was considered in the financial decision.

“My husband works in the coal industry like most everybody does back home,” Novak told the House Industry, Business and Labor Committee. “If we go down to the bank and want to take out a mortgage, we should know if we are denied a loan because they have adopted ESG into their business model.”

Betty Grande, CEO of the Roughrider Policy Center, told the committee the ESG movement is spreading.

“You will probably hear today that HB 1283 is a ‘solution looking for a problem,'” Grande said in testimony. “You will hear that financial institutions in North Dakota are not using Environment, Social, and Governance methods or any form of social credit scoring. If that is true, HB 1283 requires nothing. It simply puts up a guardrail. But, if financial service providers are fundamentally changing the way they do business, the consumer should and must be notified. It is only fair.”

Rick Clayburgh, president and CEO of the North Dakota Bankers Association, said no rule exists that requires banks to adopt ESG principles.

“The greatest risk to North Dakota Banks are the costs associated with regulatory compliance and litigation arising from these regulations, whether founded or unfounded,” Clayburgh said in his testimony.

The bill would cost the state more than $1.7 million, according to the fiscal note. The majority of the money, nearly $1.3 million, would go to salaries.

Barry Haugen, president of Independent Community Banks of North Dakota, said the bill could present a dilemma for some financial institutions.

“For example, much of my personal history is in the fossil fuel pipeline and energy services business,” Haugen told the committee. “Not every community bank would be comfortable lending to entities in this space not because of the industry, but because of their lack of lending expertise to that very unique industry.”

Proposed amendments to the bill filed Wednesday would remove the penalties section of the bill that would have charged banks with a class B misdemeanor for a violation if the bill passed.

The committee did not take a vote on the bill after the hearing.

Kim Jarrett’s career spans over 30 years with stops in radio, print and television. She has won awards from both the Georgia Press Association and the Georgia Association of Broadcasters.
Originally published by The Center Square. Republished with permission.To read more on states fighting ESG, click here, here, and here.

Kim Jarrett
Kim Jarrett
Kim Jarrett's career spans over 30 years with stops in radio, print and television. She has won awards from both the Georgia Press Association and the Georgia Association of Broadcasters.

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