Advocacy groups, government officials, and activist shareholders are using Environmental, Social, and Governance mandates to coerce banks to cut ties with politically disfavored industries like oil companies and firearms manufacturers. Now, it appears this cancellation threat is spreading to political and religious views that activists disfavor, too.
Both of our organizations have had recent run-ins with debanking. The National Committee for Religious Freedom (NCRF)—a nonprofit advocacy group that exists to defend the right of everyone in America to live out their faith freely—opened a JPMorgan Chase checking account last April. A few weeks later, the bank shut down the account without explanation.
NCRF only found that out when one of its founders tried to deposit a donation at a local Chase branch on May 19. That's when NCRF was informed that the account was restricted and marked for closure. All the local branch could share was that the corporate office had closed the account, and that bank employees weren't permitted to give additional information. The following week, NCRF received a letter dated May 6 stating that Chase would close the account and end its relationship on May 9.
Eventually, a representative at Chase's corporate office said the bank might reinstate the account if NCRF disclosed a list of donors who contributed 10 percent or more of its operating budget and divulged the criteria it uses to decide whom to support politically. Respecting donors' privacy and skeptical that the bank made the same demands of other nonprofits, NCRF declined.
As pressure mounted over cancellation of the account, Chase changed its story several times. It initially denied asking invasive questions about donors but quickly changed its tune and claimed that it had to ask these questions to comply with federal banking guidelines on money laundering and funding terrorism.
Pressed on the weakness of this untenable rationale, Chase pivoted and claimed that, as a former U.S. senator and ambassador, I (Sam Brownback) am a "Politically Exposed Person"—a designation that Chase claimed triggers heavier scrutiny before NCRF could open an account. But the relevant guidelines specify that "Politically Exposed Persons" do not "include U.S. public officials." Put simply, the rule Chase cited does not even apply.
Alliance Defending Freedom—an alliance-building nonprofit legal organization committed to protecting religious freedom, free speech, parental rights, and the sanctity of life—has also been hindered by apparent viewpoint-based screens at Fidelity Charitable. The financial giant promises donor-advised fund account holders that it is "cause-neutral," and that it "does not limit grantmaking based on political, religious, or philosophical grounds." But over the last couple of years, Fidelity Charitable has told several donors that they can't give to ADF unless they relinquish their anonymity and put their name on the grant—a major deterrence to giving—because it "cannot be assured that the grant will be used exclusively for proper charitable purposes," to quote an e-mail sent to one donor.
One Fidelity Charitable account holder informed ADF that the fund only asked him to surrender his anonymity to give to conservative nonprofits, not left-leaning ones. Over the last couple of years, he has directed gifts to four conservative nonprofits, including ADF, and to four left-leaning nonprofits through Fidelity Charitable. The gifts to the four conservative groups were either held up unless he surrendered his anonymity or were outright denied. The gifts to the left-leaning organizations passed through with no conditions, even though only one of those groups has earned a positive assessment from nonprofit industry evaluator Charity Navigator. One has received no score, another scored "poor," and the third "needs improvement."
Three of the four conservative nonprofits to which the donor tried to send money have also been labeled "hate groups" by the partisan and troubled Southern Poverty Law Center, a leading proponent of politicized banking. The SPLC teamed up with the Council on American-Islamic Relations to run a campaign called "Hate-Free Philanthropy" that specifically calls on philanthropic institutions, like Fidelity Charitable, to screen out recipients with which they disagree. And other activists have relied on the SPLC's spurious claims to demand that Fidelity Charitable publicly disclose contributions to mainstream conservative groups like ADF, Turning Point USA, and Family Research Council.
It's difficult to see Fidelity Charitable's unequal treatment as anything other than an ideological litmus test. ADF was organized as a nonprofit under 501(c)(3) of the tax code more than 25 years ago. Its legal work protecting civil liberties pro bono plainly qualifies as a charitable purpose under the Internal Revenue Code's definition—and common sense. Fidelity Charitable's recommended resources for evaluating nonprofits—Charity Navigator and GuideStar—assure donors that they can "give with confidence" to ADF, and that it has a "platinum" transparency rating.
It's clear from our organizations' experiences that politicized banking is a real threat and that it's on the rise, but we're pushing back.
Last fall, NCRF launched the #ChasedAway campaign, through which it hears from fellow Americans who have been debanked in similar ways. Meanwhile, ADF is spearheading a public campaign to urge Fidelity Charitable to stand its ground against activist pressure to impose political litmus tests on their account holders' charitable giving. ADF also launched the Viewpoint Diversity Score Business Index in May 2022, which evaluates tech and financial service companies' respect for free speech and religious freedom.
Investors and financial professionals are standing up, too. Dozens of leading financial sector CEOs, executives, and professionals have signed the Statement on Debanking and Free Speech, issued by the Viewpoint Diversity Score Business Index and addressed to CEOs of leading banks and financial institutions. It urges them to bring an end to viewpoint discrimination in their industry.
If companies don't voluntarily take steps to curb viewpoint discrimination in their services, they invite regulatory scrutiny. Some states are already considering legislation that would crack down on the debanking of ideologically disfavored industries, people, and groups. Large national banks receive wide-reaching government benefits, such as greater lending power, FDIC insurance rates, subsidies, bailouts, and an anticompetitive chartering system.
That banks receive these advantages courtesy of the government and taxpayers obliges them not to discriminate based on viewpoints in their services. And the danger that these benefits might be taken away gives financial institutions good reason to end their risky entanglement with one-sided social activism and cancel culture.
Sam Brownback is chairman of the National Committee for Religious Freedom (@TheNCRF). He served as U.S. ambassador at large for international religious freedom from 2018 to 2021. Jeremy Tedesco is senior counsel and senior vice president of corporate engagement for Alliance Defending Freedom (@ADFLegal).
The views expressed in this article are the writers' own.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
