by Glenn Minnis
Arizona Gov. Katie Hobbs has vetoed a bill seeking to establish that the state requires banks and other financial institutions to use a “social credit score” when making lending decisions concerning customers.
In rejecting the measure proposed by Rep. Steve Montenegro, R-Goodyear, Hobbs countered the legislation does not define “social credit score,” adding that ambiguity played a role in her making the decision to veto the bill.
“This bill is overly vague and should not be codified into law,” Hobbs wrote in her veto letter. “It doesn’t define ‘social credit score’ and this system doesn’t exist anywhere in the United States.”
Montenegro is on record in asserting his motivation for pushing the bill stems from the need to protect the “free market” and shield banks across the state from using factors they’d rather not have to contend with. During a recent House Commerce Committee meeting, Montenegro said he was unaware of any banks in Arizona that lent based on a social credit score and thus didn’t feel it needed to be defined in statute.
Hobbs countered if the goal of the bill is to guard against unfair lending practices that concern is already addressed by the Equal Credit Opportunity Act of 1974.
Largely based on a person’s behavior, social credit scores are used in China to gauge if citizens are allowed to do such things as purchase property or buy plane tickets.
Currently, The Department of Insurance and Financial Institutions licenses, supervises and regulates state-chartered financial institutions and enterprises across the state and is also entrusted with conducting annual assessments of the financial institutions and enterprises to ensure the industry remains strong.
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Glenn Minnis is a contributor to The Center Square.
Photo “Katie Hobbs” by Gage Skidmore. CC BY-SA 2.0. Background Photo “Arizona Capitol” by Gage Skidmore. CC BY-SA 2.0.
