BlackRock is trying to get rid of the hot seat as the GOP takes power.

As the GOP prepares to take control of Washington, the world’s largest money manager is trying to avoid some political headaches.

BlackRock Inc. ( BLK ) pulled out of the United Nations-backed climate group Net Zero Asset Managers Initiative (NZAM) late last week, following the exodus of several Wall Street banks from affiliates in the weeks before Donald Trump took office. White House again.

So was Blackrock. Additional time is given to resolve disputes With the Federal Deposit Insurance Corporation (FDIC) over the holding of US banks, the debate is now sure to take place in the opening months of Trump 2.0.

The $11 trillion financial giant has been the target of GOP attacks for years about “proactive” investing, with Republicans raising concerns about whether BlackRock’s massive holdings in corporate America will force companies to adopt environmental, social and governance (ESG) standards. BlackRock CEO Larry Fink has backed away from using a politically controversial acronym.

And Democrats have worried for years whether BlackRock’s takeover could pose a threat to the financial system.

BlackRock, which reports fourth-quarter earnings on Wednesday, will have to navigate all of these political challenges as the GOP takes control of the White House and Congress — a regulatory challenge that poses a huge new headache for money management.

A Report Last month, the Judiciary Committee, led by Ohio Republican Jim Jordan, cited BlackRock, along with Vanguard and State Street (STT), arguing that it found “evidence of collusion and anti-competitive behavior” by the financial industry to “impose aggressive ESG-goals.” “On American companies.

The report criticized the Financial Environment Coalition for creating what it called the “climate cart”.

Last Thursday, BlackRock confirmed its departure from a financial environment coalition called the Net Zero Asset Managers Initiative (NZAM).

The group had pledges of support from its NZAM members to use their influence in the financial sector to achieve net zero carbon emissions by 2050 – for example by proxy voting on climate initiatives in corporate boardrooms.

“Our membership in some of these organizations has created confusion about BlackRock’s practices and prompted legal inquiries from various government officials,” BlackRock told clients in a letter cited by Bloomberg.

The company said in the letter that its portfolio managers “continue to evaluate material climate-related risks.”

The story continues

On Monday, Net Zero Asset Managers said on its website that it had suspended operations pending a review of the initiative.

He added to that. Note “The recent changes in the US and the different regulatory and customer protections in different investors have led NZAM to initiate a review of its initiatives to ensure that NZAM remains fit for purpose in the new global context.”

Another delicate political situation BlackRock is grappling with is resisting the FDIC’s push for more regulation.

The FDIC pushed back this year’s Dec. 31 deadline and asked BlackRock on Jan. 10 to sign a “pass-through agreement” that would put more checks on the money manager’s holdings at FDIC-regulated lenders.

The agreement the FDIC required BlackRock to sign is similar to what was disclosed to Vanguard when the manager accumulated more than 10% of the shares in the FDIC-regulated bank.

It was designed for bank regulators to ensure that the giant money manager would remain a “floating” owner of an FDIC-regulated bank and would not be controlled by bank boards. Currently, BlackRock only has such an agreement with the Federal Reserve.

BlackRock has spent 2024 denying that its role as an investment regulator exercised undue control over companies.

Last Friday, BlackRock’s deadline to respond to requests for information from the FDIC was extended to February 10, putting the controversy at the start of Trump’s new presidency.

As a practical matter, BlackRock will have to decline or sign a “pass-through” agreement to control more than 10% of an FDIC-regulated bank holding company in response to the FDIC’s latest information requests. with the case.

It’s not yet known how the Trump administration will handle Black Rock’s situation, or who will run the FDIC after a Republican takes control of the White House.

David Hollert is a senior reporter for Yahoo Finance covering banking, crypto and other financial sectors.

Click here for an in-depth analysis of the latest stock market news and events that move stock prices

Read the latest financial and business news from Yahoo Finance