OPINION: Redlining the Arctic
The biggest bank in Alaska is redlining its biggest employer.
At just more than $6 billion as of June 30, 2019, Wells Fargo holds more deposits in Alaska than every other bank combined with 51 percent of the market share according to the most recent Federal Deposit Insurance Corp. data.
That is just a tiny fraction of the San Francisco-based bank’s more than $1.2 trillion in deposits nationwide, which is probably why the company’s board of directors cares not a whit about its policy of refusing to finance oil and gas projects on Alaska’s North Slope.
Along with Citigroup, Goldman Sachs, JP Morgan and Morgan Stanley — who have also announced they will not finance oil and gas projects in the state — perhaps they should be made to care.
Rather than gerrymandered borders of neighborhoods drawn in the past to exclude entire populations of disadvantaged people from credit services, these mega banks that were all bailed out by the federal government after the 2008 financial crash have taken advantage of the existing line at 66 degrees North otherwise known as the Arctic Circle.
Above this line are thousands of Alaska’s first people that the United States government made a deal with in 1971 through the Alaska Native Claims Settlement Act to exchange millions of acres of land in order to facilitate construction of the Trans-Alaska Pipeline System.
That contract guaranteeing Alaska Natives the rights of economic opportunity and self-determination is in jeopardy from these federally-backed banks that are pandering to Green New Dealers with a redlining policy that harkens back to the original New Deal of 1933.
Alaska’s congressional delegation is therefore on to something with its recent letter to Federal Reserve Chairman Jerome Powell, Comptroller of the Currency Brian Brooks and FDIC Chair Jelena McWilliams that calls out these banks’ anti-Arctic policy for what it is: discrimination against Alaska Natives.
That is no stretch. These banks are declaring they will help deny billions of dollars in potential royalties to Alaska Natives from the National Petroleum Reserve and the Arctic National Wildlife Refuge Coastal Plain that are both explicitly designated by Congress for development, as well as the state lands from which shareholders in Arctic Slope Regional Corp. and the village of Nuiqsuit would benefit.
Doyon Drilling, a subsidiary of the Interior Native regional corporation, works extensively on the North Slope and was forced to lay off more than 300 employees as ConocoPhillips shut down exploration amid the pandemic and then curbed production by some 100,000 barrels per day as prices briefly turned negative.
As of December 2019, Doyon shareholders numbered 226 at Doyon Drilling and earned $21 million in wages last year.
The Green New Dealers may believe they are only screwing with evil big oil companies, but stopping Arctic projects by turning off financing spigots will disproportionately hurt companies like Doyon that are led from top to bottom by its Native shareholders.
More broadly, these banks’ discriminatory policies hurt all Alaska Natives that would receive revenue sharing from North Slope development and the state as a whole that relies on oil revenue to pay for health care and education.
Quite simply, banks that are still in existence today thanks to the extraordinary rescue measures taken 12 years ago and who are now borrowing from the Fed at essentially 0 percent should not be allowed to discriminate against any group of people, let alone an entire state or industry.
Wells Fargo and its too-big-to-fail cohort are literally anti-Alaska.
To be clear, this is not a reflection on the bank’s state leadership or its staff, who have made overwhelmingly positive contributions to Alaska and in particular the nonprofit community.
But they have no sway in San Francisco.
This is not to suggest that banks should be forced to finance Arctic oil projects, although extending loan services into economically distressed areas was and is mandated as a remedy to historic redlining practices.
They may even have their own internal reasons for not participating in Arctic projects.
However, no bank should be allowed to publicly declare and even boast about a discriminatory policy against sovereign people, an entire state or an industry that is vital to national security while still enjoying the benefits and backing of the federal government.
Even absent a federal solution, Alaskans have other options for their money with banks and credit unions that are based here and are far more invested in the state’s future than Wells Fargo has decided to be.
Andrew Jensen can be reached at [email protected].