JPMorgan CEO Jamie Dimon recently expressed criticism of Texas laws enacted in 2021 that penalize banks limiting business with the gun and fossil fuel industries. Despite acknowledging the state's pro-business climate, Dimon warned that these laws could potentially damage its reputation. The laws in question restrict contracts with financial institutions accused of boycotting energy firms or discriminating against the firearms industry.
In response to these laws, Texas Attorney General Ken Paxton launched an investigation into several Wall Street firms, including JPMorgan, Bank of America, and Wells Fargo for potential breaches of the energy law due to their membership in the Net Zero Alliance. This probe has triggered disruptions in Texas's municipal bond market, a crucial funding source for infrastructure projects in cities, schools, and hospitals.
Dimon emphasized JPMorgan's neutrality and stated that the bank makes decisions based on risk, legal, credit, and reputational factors. He denied any claims of discrimination or boycotts against the energy or firearms industries.
Despite the ongoing controversy and disruption in bond deals, JPMorgan plans to hire an additional 1,000 local bankers by 2025 in Texas and other locations. Currently, JPMorgan employs over 30,200 individuals in Texas, with more than 17,000 based in the Dallas-Fort Worth area and a health and wellness center located at its Plano campus.
Research from the University of Pennsylvania suggests that these laws could cost Texas taxpayers millions due to limited competition in the $4 trillion municipal bond market. Following Paxton's probe, RBC Capital Markets and Wells Fargo were dropped from underwriting municipal deals approved by the Attorney General's Office.
Despite being the largest global financier of both fossil fuels and clean energy, JPMorgan was not included in the state comptroller's list of companies like Credit Agricole (OTC:CRARY) SA that restrict oil and gas business. The firm remains committed to its Texas operations and recently hosted a summit featuring notable figures such as Matthew McConaughey and Dallas Mavericks owner Mark Cuban. Meanwhile, Gov. Greg Abbott continues to promote Texas' pro-business policies.
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