SCR142

A Concurrent Resolution urging Congress and the President to prohibit private, federally regulated financial institutions from penalizing individuals for exercise of constitutionally protected speech.

Whereas, Allegations of big technology companies censoring certain speech, including political opinions, have given rise to growing controversy over the potential for companies to influence public opinion; and

Whereas, PayPal, Inc., a money transmitter licensed in this State that provides virtual financial services, notified users in September 2022 that its Acceptable Use Policy would prohibit, beginning November 3, 2022, the use of its services to send, post, or publish content that, in the company’s sole discretion, promotes misinformation; and

Whereas, The same policy would have penalized users who violated a list of other prohibitions on use of services for expression, concluding with a broad restriction on content that, in PayPal, Inc.’s sole discretion, is otherwise unfit for publication; and

Whereas, PayPal, Inc.’s Acceptable Use Policy would have permitted the company to fine violating users $2,500, which could have been pulled directly from users’ accounts; and

Whereas, PayPal, Inc. retracted its policy update following outrage from the company’s users and the general public; and

Whereas, Financial institutions are widely depended upon in the United States and New Jersey as a critical part of personal or business life; and

Whereas, PayPal, Inc. is one of many such financial institutions licensed and regulated in New Jersey; and

Whereas, Federal law regulates a broader range of activity by financial institutions than the laws of this State alone; and

Whereas, The United States is therefore able to effect broad protections for consumers who otherwise may be subject to policy changes like the one intended by PayPal, Inc.; and

Whereas, The Constitution of the United States protects freedom of speech and freedom of the press in the First Amendment; and

Whereas, New Jersey strongly values and protects the freedom of expression and freedom of the press in the State Constitution; now, therefore,

Be It Resolved by the Senate of the State of New Jersey (the General Assembly concurring):

1. The Legislature of this State respectfully urges Congress and the President of the United States to enact legislation prohibiting financial institutions organized or doing business under the laws of the United States from penalizing individuals for expressing constitutionally protected speech.

2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Clerk of the General Assembly or the Secretary of the Senate to the President of the United States, the Majority and Minority Leaders of the United States Senate, the Speaker and the Minority Leader of the United States House of Representatives, and each member of Congress elected from this State.

STATEMENT

This resolution urges Congress and the President of the United States to enact legislation prohibiting private financial institutions from penalizing individuals for expression of constitutionally protected speech.

A recent policy update notice from PayPal, Inc. indicated that its services could not be used, starting November 3, 2022, to promote misinformation, an infraction to be defined solely by PayPal, Inc. and to result in a fine of $2,500. Under the policy, PayPal, Inc. would have also been able to penalize users who would have violated other restrictions on expression, including on content that, in the sole discretion of PayPal, Inc., is unfit for publication. Public outrage led to the company retracting this change, but consumers remain vulnerable to the decisions of private financial institutions to implement similar policies going forward. Wide dependence upon financial institutions in daily life renders their ability to implement broad policies penalizing certain expressions inequitable.

This resolution urges Congress and the President to enact legislation to protect consumers from such restrictions under federal law, which has the potential to more broadly protect consumers than state law alone.