PRINTER'S NO. 3437
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2799
Session of
2022
INTRODUCED BY DIAMOND, STAMBAUGH, ZIMMERMAN, ROTHMAN, COX,
SCHLEGEL CULVER, GLEIM, GREINER, HAMM, HELM, JONES, KAUFFMAN,
KEEFER, M. MACKENZIE, PENNYCUICK, RAPP, ROWE AND STRUZZI,
SEPTEMBER 7, 2022
REFERRED TO COMMITTEE ON COMMERCE, SEPTEMBER 7, 2022
AN ACT
Prohibiting financial institutions from using social credit or
environmental, social or governance scores; and imposing
penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Liberty,
Virtue and Independence Act.
Section 2. Findings and declarations.
The General Assembly finds and declares as follows:
(1) The practice of discrimination against any
Commonwealth inhabitants, including individuals, associations
and businesses, through use of their social credit score or
environmental, social or governance score is a matter of
Statewide concern.
(2) Discrimination based on the scores not only
threatens the rights and privileges of Commonwealth
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inhabitants, but menaces the institutions and foundation of
our free democratic state and threatens the peace, order,
health, safety and general welfare of the Commonwealth and
its inhabitants.
Section 3. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Business." An individual, partnership or corporation
engaged in commerce, manufacturing or service.
"Environmental, social or governance score." Subjective
metrics from a company that investors use to determine the value
of the company.
"Financial institution." A depository institution, trust
company, licensee, person subject to the jurisdiction of the
Securities Exchange Commission or person subject to the
jurisdiction of the Department of Banking and Securities under
the act of December 5, 1972 (P.L.1280, No.284), known as the
Pennsylvania Securities Act of 1972.
"Social credit score." A system to evaluate the
trustworthiness or reliability of an individual based on a
complex combination of personal data, like demographic
information, online and offline behaviors and social network
activity.
Section 4. Prohibition.
(a) Prohibition.--Except as provided under subsection (b), a
financial institution or business conducting a transaction in
this Commonwealth, either directly or through the use of an
outside contractor, may not discriminate against, advocate for
or cause adverse treatment of a citizen or business's practices
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based on subjective or arbitrary standards such as:
(1) social media posts;
(2) participation or membership in a club, association
or union;
(3) political affiliation;
(4) employer; or
(5) a social credit score or an environmental, social or
governance score or other similar values.
(b) Exceptions.--
(1) Subsection (a) shall not apply if the practice is
fully disclosed to the potential customer before a customer
and business enter into a business transaction.
(2) Subsection (a) shall not prohibit a financial
institution or business from discontinuing or refusing to
conduct a transaction with an individual account holder or
potential customer if the action is necessary for the
physical safety of its employees.
(c) Subjective standards.--Notwithstanding subsection (a), a
financial institution or business may offer customers
investments, products and services that include subjective
standards, if the standards are disclosed and explained to any
potential customer or investor before entering into a contract
for the products or services.
Section 5. Enforcement.
(a) Violations.--A financial institution or business
violating section 4(a) shall be subject to:
(1) A fine of $50,000 for a first offense.
(2) A fine of $250,000 for a second and each subsequent
offense.
(b) Criminal prosecution.--If a financial institution or
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business has five or more offenses, criminal prosecution may be
included along with a fine assessed under subsection (a).
Section 6. Effective date.
This act shall take effect January 1, 2023.
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