WASHINGTON (Reuters) – A group of Republican lawmakers from energy-producing states on Friday called on President Donald Trump to prevent banks from halting loans and investments with companies that produce oil and other fossil fuels as ” they have access to federal assistance programs during the COVID -19 pandemic.

“The big Wall Street banks… the energy companies and the workers,” lawmakers wrote in a letter to Trump.

Democratic lawmakers like Senator Elizabeth Warren, who want an economic recovery that includes investments in conservation and alternative energy to tackle climate change, have called on Treasury Secretary Steve Mnuchin to ban oil and gas companies from accessing loans through the Main Street facility.

Many energy companies are struggling to avoid bankruptcy due to the collapse in global crude prices after governments around the world issued stay-at-home orders that wiped out demand for jet fuel and jet fuel.

For years, environmental activists have pressured banks and finance companies to drop support for fossil fuel companies.

Republican lawmakers, led by Senators Kevin Cramer of North Dakota and Dan Sullivan of Alaska, and Representatives Don Young of Alaska and Liz Cheney of Wyoming, have accused some major US financial institutions of halting investments in fossil fuels to “appease the environmental fringe”. They specifically cited BlackRock Inc, the world’s largest asset manager, which has been given a pivotal role in the COVID-19 business takeover as a trustee of the Federal Reserve Bank of New York.

BlackRock announced in January that it was withdrawing from burning coal at power plants. Its global head of sustainable investing, Brian Deese, was a climate official in the White House under former President Barack Obama, a Democrat.

“Given BlackRock’s central role as the Federal Reserve’s trustee for the distribution of the CARES Act credit facilities, its hostility to the US energy sector is unacceptable and should be closely scrutinized,” the lawmakers wrote.

Lawmakers urged Trump to use “all administrative and regulatory tools” to prevent these institutions from participating in federal lending programs while “discriminating” against investments in parts of the energy sector, but did not specify which action could be taken.

A spokesperson for BlackRock said the company will execute its tenure as trustee of the Federal Reserve Bank of New York “at the bank’s sole discretion, and in accordance with their detailed investment guidelines, in order to provide broad support credit markets and meet the government’s goal of supporting access to credit for U.S. employers and supporting the U.S. economy.

Energy Secretary Dan Brouillette said in a recent interview that he and Mnuchin plan to work with US regulators and the banking industry to ensure that financial institutions do not discriminate against oil drillers when they choose to who to grant credits.

Report by Valérie Volcovici; Editing by David Gregorio and Leslie Adler


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