Prohibiting discrimination by financial services companies on the basis of social credit score and requiring registered investment advisers to obtain written consent from clients prior to investing client moneys in mutual funds, equity funds, companies and financial institutions that engage in ideological boycotts.
The introduction of SB16 will modify various components of existing state laws pertaining to financial practices. By legislating against discrimination based on social credit scores, the bill seeks to influence how financial institutions assess clients. This could result in a significant shift in the operational policies of banks and investment firms, as they will need to revise their criteria for customer evaluation. Furthermore, the bill creates a disclosure requirement, necessitating that clients be informed if their financial service access is denied, including the rationale behind such decisions.
Senate Bill 16 aims to prohibit discrimination by financial services companies based on a person's social credit score. It defines a social credit score broadly, incorporating various factors such as environmental compliance, support for certain corporate diversity standards, and lifestyle choices, among others. The bill is designed to ensure that individuals are granted access to financial services regardless of their personal beliefs or business affiliations. Under this bill, financial services companies are expected to provide services on a nondiscriminatory basis without imposing standards that extend beyond typical financial assessments.
Despite its intent to provide equity in financial access, the bill has faced criticism from various groups, particularly from those concerned about the broader implications of enforcing social credit systems. Opponents argue that the social credit score concept could unfairly stigmatize individuals based on non-financial criteria, potentially leading to economic discrimination. Moreover, the language around ideological boycotts triggers debates about freedom of expression and the ethics of corporate governance, highlighting a potential battleground between financial services and political or social values.
Enforcement of the provisions in SB16 places requirements on financial services companies with total assets exceeding $20 billion. If violations occur, penalties include being classified as engaging in deceptive practices, with the Attorney General empowered to pursue investigations and impose sanctions. These measures underscore the state's commitment to maintaining an equitable financial ecosystem while closely monitoring adherence to the law.