(Bloomberg) -- Fresh off a win in Louisiana, Bank of America Corp. was dealt a blow by a Republican official in the state.
On Monday, Louisiana State Treasurer John Fleming said he wouldn’t recommend Bank of America’s application to become a state depository and fiscal agent for the state — his counsel will be considered by an ad hoc panel. There are nearly 100 banks that have been approved to work as state depositories and fiscal agents, according to the state.
“It is my opinion and that of many Americans that financial institutions should not weigh in on matters involving a political viewpoint, either conservative or liberal,” Fleming said in a statement, citing concerns that the company is denying banking services to certain clients like religious organizations and gunmakers.
The lender provides services to more than 100,000 nonprofits associated with religious organizations, according to Bill Halldin, a spokesperson for Bank of America. He said the treasurer’s comments on the company were factually incorrect and that religious views are not a factor in account closings.
The skirmish is the latest in the ESG culture wars as officials from GOP-led states like Texas and Louisiana target Wall Street banks over their social policies.
The application was made to the Interim Emergency Board — a panel comprised of officials including a designee of the treasurer’s office — which then approves financial institutions as state depositories and fiscal agents. It makes those decisions after considering the treasurer’s recommendation, according to state law.
Just last week, Fleming and other members of the Louisiana state bond commission had approved Bank of America as a member of a pool of underwriters that can work on state bond deals. It’s a less competitive space — there are less than two dozen municipal-bond underwriters that have managed deals in the state this year, according to data compiled by Bloomberg.
At that meeting, Fleming said he had concerns about working with certain banks but acknowledged that “only a small number” of banks could “do the level of business that a state treasurer requires.”
It may have been easier for Fleming to instead look to restrict Bank of America from the state’s depository business, which has more participation among banks. His office didn’t respond to a request for comment.
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