The Treasury Department has issued a warning about state laws that prevent banks from considering environmental, social, and governance factors. In a letter sent to lawmakers, the Treasury Department expressed concerns that these laws could hinder efforts to combat money laundering and terrorism financing. The letter specifically mentioned a law signed by Florida Gov. Ron DeSantis in May, which prohibits banks from taking non-financial factors into account when conducting business.
DeSantis and other conservative Republicans argue that environmental and socially conscious investing standards could lead to unfair discrimination based on political beliefs and harm legitimate businesses. They believe that prioritizing environmental, social, and corporate-governance issues before making investment decisions is excessive woke behavior.
DeSantis defends the Florida law by stating that it aims to safeguard the access of conservative groups and the firearms industry to the financial sector, citing instances where their accounts were frozen or closed. However, the Treasury Department expressed concerns that such laws could undermine the work of federal agencies and increase the risk of illicit activities like money laundering and evasion of sanctions.
The Treasury Department’s letter was in response to a request from Rep. Josh Gottheimer, Rep. Blaine Luetkemeyer, and Rep. Brad Sherman. Gottheimer welcomed the Treasury Department’s alignment with his concerns and urged states contemplating similar laws to reconsider their impact on national security.
The Treasury Department cautions that a Florida banking law challenging woke culture poses a threat to national security
