Wall Street Banks Cleared by Texas After Exiting Climate Group
January 8, 2025
(Bloomberg) — Texas Attorney General Ken Paxton dropped his threat to cut off big US banks from municipal-bond deals after a slew of Wall Street firms exited a controversial climate-finance alliance.
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In 2023, his office announced that it was reviewing the policies of finance companies that were members of the Net-Zero Banking Alliance, which he has repeatedly criticized. That stemmed from Texas legislation that sought to punish financial firms for engaging in what it viewed as a “boycott” of the oil and gas industries. In recent weeks, JPMorgan Chase & Co., Bank of America Corp., Morgan Stanley and Wells Fargo & Co. have said they’re quitting the alliance.
Paxton’s office said late Tuesday that its reviews of Wells Fargo, Bank of America, Morgan Stanley, and JPMorgan will be closed. Those firms are major underwriters of state and local debt in Texas, one of the biggest markets for muni deals. The Texas attorney general’s office approves most public bond offerings before they’re able to close, giving Paxton influence over which banks can participate in such transactions.
Spokespeople for Morgan Stanley, Wells Fargo, and JPMorgan did not immediately respond to an emailed request for comment outside of normal business hours. A representative for Bank of America declined to comment.
In a statement, his office said the alliance pushes members to advance “destructive climate goals regardless of their obligations to consumers and investors.”
“The NZBA seeks to undermine our vital oil and gas industries, and membership could potentially prevent banks from being able to enter into contracts with Texas governmental entities,” Paxton said.
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