Treasurers from 15 states warned U.S. climate envoy John Kerry in a letter this week that they could withdraw assets from any banks that reduce loans to fossil fuel companies, following reports that the Biden administration has pressured financial institutions over such loans.
Riley Moore, state treasurer of coal and natural gas producing West Virginia, said the Biden administration’s efforts would, if enacted, cripple fossil fuel companies and threaten jobs of thousands of workers in his state.
States would consider how banks handle the issue “before entering into or extending any contract” with them, said the letter led by Riley and signed by treasurers from Pennsylvania, Ohio and other states, sent on Tuesday to Kerry.
“We intend to put banks and financial institutions on notice of our position, as we urge them not to give in to pressure from the Biden administration,” the letter said, pointing out that states have billions of dollars of assets in U.S. banks.
The State Department did not immediately respond to a request for comment. The administration has not issued any orders that would penalize U.S. banks for making loans to fossil fuel producers, but has pushed for restrictions.
Last week, President Joe Biden directed federal agencies to assess and mitigate the risks that climate change poses to businesses and the U.S. financial system.
Climate activists said the executive order sent a powerful signal to U.S. banks, insurance companies and asset managers to stop funding fossil-fuel projects.
Combined, the 15 states signed to the letter manage at least $600 billion in government accounts, said Jared Hunt, the deputy treasurer-communications director in the West Virginia Treasury.
In April, Republican senators including Pat Toomey of Pennsylvania, wrote a letter to Kerry saying if the administration wants to diminish fossil energy production it “should not misuse financial regulators” but seek to have laws amended through Congress.