Additional Coverage:
- Treasury warns that anti-woke banking laws such as those in Florida are national security risk (newsbreak.com)
The U.S. Treasury Department has expressed concerns that state laws limiting banks from considering environmental, social, and governance (ESG) factors might impede efforts to combat money laundering and terrorism financing. This warning was conveyed in a letter the department sent to congress members, which was accessed by the Associated Press.
The document specifically critiques a recent statute endorsed by Florida Governor Ron DeSantis in May, which categorizes the inclusion of non-financial factors in banking decisions as a risky banking practice. The Treasury fears such laws could disrupt national security operations.
Governor DeSantis and other conservative leaders have opposed the integration of ESG considerations into investment decisions, arguing that it promotes discrimination based on political ideology and disadvantages certain legitimate businesses. They claim that decisions influenced by ESG considerations represent an extreme form of progressive activism.
The state of Tennessee has similarly passed legislation akin to Florida’s, although it was not addressed in the Treasury’s letter. Other states including Arizona, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, and South Dakota are contemplating comparable bills.
Governor DeSantis defends the Florida law, suggesting it ensures that conservative organizations and the firearms industry are not unjustly excluded from financial services, citing past incidents of account closures and restrictions.
The Treasury’s letter warns that such state legislation could potentially weaken the effectiveness of U.S. federal agencies in safeguarding against threats like international drug trafficking and terrorism, thereby risking the integrity of the U.S. financial system.
The concerns by the Treasury were raised in response to a query from Democratic Representative Josh Gottheimer of New Jersey, alongside Republican Representative Blaine Luetkemeyer of Missouri, and Democrat Brad Sherman of California. Rep. Gottheimer has commended the Treasury for aligning with his concerns and warned other states to reconsider similar legislative maneuvers that might jeopardize national security.
For further information on the Treasury’s activities, visit the Associated Press’s dedicated hub on the department.