And so it begins–2023 Legislative Session

It’s day 1 of the 2023 Utah state legislative session.  We’ve been tracking the movement of several potential bills. At least one just made the leap from idea to bill.

Here’s what we’re seeing right out of the gate:

  • SB 97 Public Contract Requirements: This is the first in a series of bills we call anti-ESG. Just like last year, there is legislative energy to keep the financial institutions from harming business in areas of commerce that are part of larger ideological fights, like 2nd amendment or oil and gas. This one is a variation on the bill that Rep. Shipp had last year trying to protect the fossil fuel industry. We don’t have a particular dog in the fight on oil and gas, but the bill does create ambiguity in using an undefined term “boycott”.  As you know, CUs are in the business of evaluating risk and we’re concerned that our normal underwriting process could be pegged as a boycott should a borrower not like the outcome of an underwriting decision.

  • Social Credit Score Amendments: currently just a bill file by Rep. Cheryl Acton, waiting on drafting.

    The is also a returning bill from last year. This bill is a reaction to a process the Chinese Communist Party uses in China to evaluate the behavior of their citizens. It’s not really a thing here but this is a messaging bill aimed at big tech primarily. Our concern is, as drafted last year’s unsuccessful bill, institutions would be precluded from using an alphanumeric code to evaluate the behavior of citizens. Obviously that bounces up against credit scoring which threatens our normal credit worthiness process.

We expect at least 2 more anti-ESG bills to be filed and will update you when they are.

There has also been chatter related to a potential bill that would prohibit the sale of bank assets to a tax-exempt organization.

This is still just chatter.  We’ve been working on our response should that issue develop.

We do know that a senator is working on a financial institutions bill reportedly focused mostly on the industrial bank charter. We’ll continue to monitor that as well.

Undoubtedly we’ll see more.  Stay tuned and don’t hesitate to reach out if you have any questions.