The Treasury Department is warning that state laws that restrict banks from considering environmental, social and governance factors could harm efforts to address money laundering and terrorism financing. The Associated Press obtained a copy of the letter sent Thursday to lawmakers. The letter singled out a law signed by Florida Gov. Ron DeSantis in May that says it would be an “unsafe and unsound practice” for banks to consider non-financial factors when doing business. The letter concludes that “such laws create uncertainty and may inhibit” national security efforts.
Quick Read
- Treasury Warns of Anti-Woke Banking Laws:
- National Security Concerns: The Treasury Department has issued a warning that state laws restricting banks from considering environmental, social, and governance (ESG) factors could jeopardize national security efforts, particularly in combating money laundering and terrorism financing.
- Focus on Florida Law: The warning specifically addresses a Florida law signed by Governor Ron DeSantis, which deems it unsafe for banks to factor in non-financial considerations in their business operations. The Treasury letter argues this law could create uncertainty and hinder national security efforts.
- Conservative Backlash: Conservative Republicans, including DeSantis, argue that such laws are necessary to prevent political discrimination and protect conservative groups and industries like firearms, which they claim have faced unjust financial restrictions.
- Other States’ Legislation: Similar measures are under consideration or have been enacted in several other states, including Tennessee, Arizona, Georgia, and more.
- Treasury’s Position: The Treasury Department’s letter, prompted by a request from lawmakers, emphasizes that laws like Florida’s could exacerbate risks related to international crime and undermine federal efforts to secure the financial system.
- Congressional Response: Rep. Josh Gottheimer expressed approval of the Treasury’s stance and urged other states to reconsider such laws to avoid compromising national security.
The Associated Press has the story:
Treasury warns that anti-woke banking laws like Florida’s are a national security risk
Newslooks- WASHINGTON (AP) —
The Treasury Department is warning that state laws that restrict banks from considering environmental, social and governance factors could harm efforts to address money laundering and terrorism financing.
The Associated Press obtained a copy of the letter sent Thursday to lawmakers. The letter singled out a law signed by Florida Gov. Ron DeSantis in May that says it would be an “unsafe and unsound practice” for banks to consider non-financial factors when doing business. The letter concludes that “such laws create uncertainty and may inhibit” national security efforts.
Conservative Republicans such as DeSantis have sought to block environmental and socially conscious standards for investing, saying that such initiatives can lead to unfair discrimination based on political beliefs and harm legitimate businesses. They say that considering environmental, social and corporate-governance issues, or ESG, before deciding whether to invest is woke behavior gone amok.
Tennessee recently enacted a similar law, although it was not mentioned in the Treasury letter. State legislatures in Arizona, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana and South Dakota also have measures along these same lines under consideration.
DeSantis has said the law being questioned by the Treasury Department would protect the access that conservative groups and the firearms industry have to the financial sector, arguing that such organizations have at times had their accounts frozen or closed.
The Treasury Department letter said that the Florida law could, however, undermine the work of federal agencies, heightening “the risk that international drug traffickers, transnational organized criminals, terrorists, and corrupt foreign officials will use the U.S. financial system to launder money, evade sanctions, and threaten our national security.”
The Treasury Department letter was a response to a July 8 request from Rep. Josh Gottheimer, D-N.J., Rep. Blaine Luetkemeyer, R-Mo., and Rep. Brad Sherman, D-Calif.
Gottheimer said he was pleased that the Treasury Department shared his concerns. “To any states that are considering similar laws, I urge them to think twice before putting America’s national security at risk,” the congressman said in a statement.
