In a break from the usual news about how Louisiana trails other states in sensible policy-making, it’s nice to see the state lead on at least one issue.
Taking effect last month, a law in Texas mirrors the administrative decision made by Louisiana’s State Bond Commission in 2018. The law requires that underwriters for bond sales by government entities in the state comply with a non-discrimination clause relative to gun manufacturers: an underwriter who has a policy of refusing lending to that industry can’t bid on underwriting government debt.
The SBC voted on such a restriction at a time when two such discriminating entities, Bank of America and Citigroup, planned to bid on $600 million in state business. Since then, JPMorgan has proclaimed a similar discriminatory policy.
At the time, critics, including the Democrat Gov. John Bel Edwards administration, claimed taxpayers could pay more in fees, on the assumption that removing competition could displace a potential lowest bidder. Data don’t exist to confirm or deny that assertion nor the amount of business that might have been affected, but if at all it would seem trivial and well worth it to pressure companies that discriminate against legal businesses.
But in the scheme of things, whatever amount woke banks lost out on in Louisiana seems minor compared to the hit they’ll take in Texas. In 2020, the trio underwrote $18.6 billion in business, or nearly 40 percent of the book. With this major upping of the ante and the attention it has raised, likely more states will pass similar laws.
And they have Louisiana to thank, but the original adopter has further work to do. The SBC decision lasts only as long as a majority on it has the wisdom to maintain it, and it can vary on a case-by-case basis. As Texas has done, legislators must put this into law and persist in those efforts if the unenlightened Edwards vetoes versions successfully without override, although his obstructiveness will end within two years.
Still, even in its temporary form, Louisianans can celebrate an instance where state policy-makers innovated, rather than drag the rear or eschew altogether wise policy as has become the all-too-frequent case with Edwards in the Governor’s Mansion.