A Texas lawmaker has introduced a measure to safeguard businesses against discriminatory lending practices, including those based on ideological standards.
Senate Bill 946, filed by State Sen. Bryan Hughes (R-Mineola), aims to protect businesses against values-based financial discrimination.
Under SB 946, authorized lenders would be prohibited from denying an extension of credit, including a loan, based on an organization’s failure to meet environmental, social, and governance (ESG) scores or diversity, equity, and inclusion (DEI) standards.
The legislation mandates that lenders assess financial risk using only qualitative, impartial standards, rather than ideological benchmarks.
“For businesses, SB 946 offers much-needed financial protection by guaranteeing that credit access is determined by financial metrics rather than ideological compliance,” wrote Texas Policy Research President Jeramy Kitchen. “This provides greater certainty for business owners looking to expand, invest, or maintain operations in Texas.”
“For lenders, the bill signals a major shift toward transparency in financial decision-making,” Kitchen continued. “While it restricts the use of ESG scores, it also encourages standardized, quantifiable risk assessments based on actual financial performance metrics.”
The measure would also protect against religious discrimination and industry affiliations, including with agriculture, fossil fuels, firearms, or free-speech media platforms.
“Texas has led the fight against banks and financial firms that target the Texas energy industry. Oil and gas in Texas provides good, high paying jobs and reliable, low cost energy,” Hughes told Texas Scorecard. “With Senate Bill 946 we want to make sure that banks don’t cut Texans off from credit based solely on their political or social views. We cannot allow the financial system to be weaponized against Texans.”
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