The Oklahoman published a story today about the negative impacts from the State of Oklahoma banning government entities from doing business with certain financial institutions, and highlighted facts unsurprising to the Oklahoma Bankers Association and its member banks.
The ban, which is on financial institutions that supposedly “boycott” oil and gas companies, will reportedly already cost one Oklahoma community more than $1 million because of higher interest rates because the city is unable to do business with any institutions on the banned list.
“ESG (environmental, social and government) bills, similar to this one, have been passing state legislatures across the country in the past couple of years,” said Adrian Beverage, president and CEO of the Oklahoma Bankers Association. “While these bills provide elected officials a short-term political victory, they are also giving their constituents a loss that will cost them dearly for years to come.”
The Oklahoman article quoted the Stillwater mayor who said his city had to shelve its plan to borrow money from Bank of America for a needed municipal infrastructure project because of BoA’s inclusion on the state’s banned institutions list. Instead, the City of Stillwater was forced to use a different financial institution with a higher interest rate than BoA, which reportedly cost the city – and its taxpayers – “nearly $1.2 million in additional costs.”
These types of outcomes are unfortunate, but ultimately unsurprising, to the OBA and its members. Studies of similar types of bans in other states have shown their taxpayers have borne the brunt of these forms of legislation. Texas, for example, has reportedly raised the annual costs to its taxpayers by more than $400 million because of these examples of “ESG” legislature, according to an article earlier this year in the Dallas Morning News.