NC House committee approves bill that targets socially responsible lending in agriculture

Yahoo

25-02-2025

A farmer harvests soybeans. USDA Natural Resources Conservation Service photo by Brandon O'Connor.
The North Carolina House Judiciary 1 Committee approved a bill Tuesday that its sponsors say is designed to prevent banks and credit unions from using discriminatory practices in transactions with the state's farmers. The bill, however, has nothing to do with race, gender or other societal groups traditionally victimized by discrimination in agriculture.
Instead, House Bill 62, the 'Farmers Protection Act,' is the latest in a growing catalogue of legislative proposals across the country introduced by conservative lawmakers that target 'ESG' — short for 'environmental, social, governance' and the practice whereby corporate actors take such matters into account.
North Carolina's former Treasurer Dale Folwell regularly championed the anti-ESG cause and in 2023 helped win enactment of a new state law — passed over then-Governor Roy Cooper's veto — that banned the use of ESG in multiple parts of state government, including investment decisions.
The new bill would ban banks and credit unions from denying service to agriculture producers based on their greenhouse gas emissions, use of fossil-fuel derived fertilizer, or use of fossil-fuel powered machinery, according to the bill text.
The bill would also establish a rebuttable presumption that if a bank or credit union has made an ESG commitment related to agriculture, it is in violation of the law if it restricts service to a farmer (e.g., turning down a loan application).
The rebuttable presumption can only be overcome if the lender provides evidence that its denial or restriction of a service was based 'solely on documented financial considerations rather than an ESG commitment,' the text reads.
Since the bill would exclude banks at the national level, Rep. Hugh Blackwell (R-Burke) asked if its sponsors have looked at ways North Carolina could motivate them to implement the policy.
'There are federal regulations coming,' Balkcom said. 'Once that happens, we'll be able to customize with this.'
Mark Swallow from Democracy Out Loud testified against the legislation during the public comment portion of the meeting.
He said this bill is about protecting the fossil fuel industry, not farmers.
'It uses legislation to bully banks and especially credit unions….' Swallow said. 'This legislation will hurt, if not kill agriculture in our state by preventing it from evolving to address the new reality of changing climate.'
Swallow encouraged the committee to rewrite the bill to reduce the use of fossil fuels and protect the environment, saying the changing climate will hurt farmers much more than financial discrimination, but the committee was unmoved.
The measure, which is sponsored by Reps. Neal Jackson (R-Moore, Randolph), Jimmy Dixon (R-Duplin, Wayne), Jennifer Balkcom (R-Henderson), and Karl Gillespie (R-Cherokee, Clay, Graham, Macon) was approved on a voice vote and referred to the House Agriculture and Environment Committee, which is chaired by Rep. Dixon.