This shareholder meeting season, free speech is on the ballot like never before at some of the nation’s most influential Fortune 500 corporations.
In JPMorgan Chase and PayPal’s case, this is happening only after leadership’s failed appeals to the U.S. Securities and Exchange Commission. The SEC ruled against requests from both corporations to quash shareholder resolutions insisting that companies answer to their stockholders for a growing trend of debanking people for their religious or political views. This trend is driven by political and ideological commitments that too often resemble a nascent social credit regime.
Other companies like Capital One, Mastercard, and Charles Schwab did not petition the SEC and directly allowed shareholders to consider the proposals on their own at their upcoming meetings.
Shareholders are concerned about high-profile cases of politicized debanking where some customers have been punished, seemingly for their political or religious views. In the past two years, Chase has denied payments or canceled accounts associated with people and organizations who hold mainstream American values, such as former Ambassador Sam Brownback, the Arkansas Family Council, and Defense of Liberty under suspicious circumstances.
Brownback’s treatment by the nation’s largest bank is particularly concerning. As he has written elsewhere, with no warning or initial explanation, in 2022, Chase canceled the bank account of his newly formed nonprofit organization, the National Committee for Religious Freedom. Chase eventually considered reinstating the account after a persistent effort from NCRF staff—but only if NCRF was willing to compromise donor confidentiality and disclose other information the bank had no legitimate reason for demanding. But NCRF was unwilling to betray its donors so it did not continue trying to bank with Chase.
Chase’s actions in this instance have generated widespread concern. In November 2022, Chase was featured prominently in the “Statement on Debanking and Free Speech,” signed by a group of nearly 60 financial professionals. Then, in late March 2023, Nebraska State Treasurer John Murante led a group of 14 colleagues in a letter to Chase CEO Jamie Dimon calling on him to address and correct the issue.
The Statement on Debanking and Free Speech also called attention to a troubling trend at PayPal. In September 2022, the payment processor disabled the account of a group called the Free Speech Union without explanation, only to reinstate the account days later after facing significant public backlash.
Soon after, PayPal announced that it was changing its terms of service to block donations to individuals and organizations promoting disfavored speech, even going so far as to specify that it would penalize offending accounts for each violation of the policy.
While PayPal removed a prohibition on the “[promotion] (of) misinformation” from its policy after facing public pressure, the same fine can still be imposed on users for engaging in whatever PayPal deems as “the promotion of hate … or other forms of intolerance that is discriminatory … .”
Overly broad and vague terms of use like PayPal’s—which our Viewpoint Diversity Score Business Index found to be ubiquitous among the nation’s largest tech and financial services corporations—are easily weaponized against political foes. That’s why Chase (15%), PayPal (7%), Capital One (13%), and Mastercard (10%) all scored so poorly on the Business Index, which is the first comprehensive benchmark measuring corporate respect for free speech and religious freedom. (Charles Schwab was not evaluated in the 2022 report).
If we want to solve the threat of politicized debanking and deplatforming, we have to identify and uproot policies like these across corporate America. And that’s exactly what this season’s slew of shareholder resolutions hope to accomplish. Each calls upon company leadership to investigate their problematic actions and policies as highlighted by the Business Index, and each identifies model policies from the Business Index that respect the free speech and religious liberty of all the company’s stakeholders.
Major corporations like Chase and PayPal need to rebuild trust with their shareholders and clients, but that can’t happen unless they answer basic questions about how they treat their customers and ultimately promise to treat customers equally, without political or anti-religious bias.
Now that the SEC has weighed in on the side of shareholder transparency, it’s time for America’s top companies to deliver the disinfecting sunlight that’s so badly needed.
Michael Ross is legal counsel for Alliance Defending Freedom (@ADFLegal).
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