News88th TXLege

Texas House Lawmakers File Legislation to Prohibit Social Credit Scores

November 29, 2022
Jeramy Kitchen
Cody Harris, ESG, Social Credit Score, Steve Toth

Among the hundreds of pieces of legislation filed ahead of the upcoming 88th Legislative Session, some Texas state lawmakers are attempting to prohibit a phenomenon that has grown over the last few decades, instituted by a combination of government and business practices around the world, called “social credit scores.”

Perhaps the most well-known implementation of such a phenomenon is that of China, which uses a combination of both government and business surveillance to give its citizens a score that can then be used to restrict or permit those citizens’ actions such as traveling, acquiring or purchasing property, or receiving loans.

In the United States, several private companies and various echelons of government have already begun to entertain similar policies, causing some citizens to cry foul. Leftist activists have bullied both businesses and the government to divest from industries like fossil fuels and others that they perceive as running politically afoul of “social responsibility.”


What About Texas?

Ahead of the legislative session that is set to begin in January of 2023, Taxpayer Champion and Republican State Rep. Steve Toth (The Woodlands) filed legislation seeking to prohibit financial institutions and other businesses from using “value-based criteria” in their respective business practices.

Notably, the legislation would also allow for civil action to be brought against a financial institution or business by which any Texas resident alleges discrimination based on value-based criteria, such as a person’s social media activity or their membership or participation in a club, association, or other group. This criteria also includes a person’s political affiliation or beliefs, the person’s current employer, environmental and social governance (ESG), or similar value-based standards.

Republican State Rep. Cody Harris (Corsicana) filed similar legislation aimed at only financial and lending institutions. The legislation would prohibit the use of certain credit scores, perceived ESG risks, and perceived social credit scores when attempting to determine whether or not to lend. If passed, it would allow for a civil penalty against the institution of up to $50,000 for the first violation and an additional $250,000 for each subsequent violation.

In the 87th Legislative Session (2021), Texas lawmakers passed Senate Bill 13, which ultimately prohibits local governments from conducting business with financial institutions that have adopted ESG policies and divested from the fossil fuel industry as a result.

As a result, in August, Texas Comptroller Glenn Hegar published a list of 348 investment funds and 10 financial institutions that Texas governmental entities must divest from.


What is Next?

The 88th Legislative Session does not begin until January of 2023. It is likely that state lawmakers will consider both the aforementioned legislation and yet-to-be-filed legislation relating to prohibiting state-operated pensions from using value-based criteria like that of ESG in their investment decisions.

Leveraging the government in such a way as to institute a social credit score is antithetical to individual freedom and jeopardizes future prosperity. Concerned Texans can contact their state lawmakers here.