Enacted in 2022, the Energy Discrimination Elimination Act prohibits the state from doing business with financial institutions that “inflict economic harm” on fossil fuel companies. The State Treasurer is responsible for compiling a list of prohibited companies with environmentally and socially conscious investing policies.

Most of the 13 banks on current Treasurer Todd Russ’s blacklist are members of climate alliances that avoid investing in oil and gas. The act prevents Oklahoma state agencies and pension systems from using some of the country’s largest banks, like JPMorgan Chase, Wells Fargo and Bank of America.

Last year, retired state employee Don Keenan sued Russ, saying the blacklist could harm his pension and the pensions of all state retirees, because it limits where those funds can be invested.

“The State of Oklahoma believes that making political statements with retiree dollars is more important than taking care of retirees themselves,” reads the lawsuit. “Mr. Keenan brings this suit to ensure that going forward, the State and the Treasurer abide by their constitutional and statutory obligations to operate the retirement systems for the ‘exclusive benefit’ of its pensioners.”

Russ filed a motion to dismiss Keenan’s suit last month. But District Court Judge Sheila Stinson denied the motion, allowing it to move forward.

Meanwhile, the Oklahoma legislature is considering legislation to broaden the scope of the Treasurer’s blacklist on banks.

House Bill 3541 — sponsored by Rep. Mark Lepak, R-Claremore, and Sen. Shane Jett, R-Shawnee — would amend the law, allowing the Treasurer to also blacklist banks that boycott timber, mining and agriculture businesses.

The House Banking, Financial Services and Pensions Committee voted 4-3 to put the measure before the full House.