WASHINGTON — WASHINGTON (AP) — The Ministry of Finance warns that state laws that restrict banks from considering environmental, social and governance factors could be detrimental to combating money laundering and terrorist financing.
The Associated Press obtained a copy of the letter sent to lawmakers Thursday. The letter noted a law signed by Florida Governor Ron DeSantis in May stating that it would be an “unsafe and unhealthy practice” for banks to consider non-financial factors when conducting business. The letter concludes that “such laws create uncertainty and may hamper national security efforts.”
Conservative Republicans like DeSantis have tried block of environmentally and socially conscious standards for investingand say that such initiatives could lead to unfair discrimination based on political beliefs and harm legitimate businesses. They say they take into account environmental, social and corporate governance issuesor ESG, before you decide to invest, woke behavior has gotten out of hand.
DeSantis said the bill being challenged by the Treasury Department would protect conservative groups and the gun industry from accessing the financial sector, which he said has sometimes had its accounts frozen or closed.
However, the Treasury Department’s letter said Florida’s law could undermine the work of federal agencies, “increasing 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’s letter was in 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.
“I urge all states considering similar legislation to think twice before endangering America’s national security,” the congressman said in a statement.
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