A recent letter sent to federal lawmakers from the U.S. Treasury Department outlines serious consequences of debanking legislation at the state level, citing HB 989, a law recently implemented in Florida.
Treasurer Under Secretary Brian Nelson warned that the trend of debanking laws like Florida’s put national security at risk. The letter stated HB 989 could 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’s letter was written in response to a request from a bipartisan group of lawmakers in Congress.
As the authors of the letter, Republican U.S. Rep. Blaine Luetkemeyer of Missouri and Democratic U.S. Reps. Josh Gottheimer of New Jersey and Brad Sherman of California, wrote regarding the controversial legislation, “These state laws may conflict with federal laws intended to combat money laundering and terrorist financing. A consistent national framework is vital for the protection of U.S. national security, and the U.S. and international financial systems, as well as economic stability and security.”
“We urge the U.S. Treasury Department, FinCEN, and the OCC to take action to ensure the continued integrity of these important federal requirements,” they continued. “As more states consider similar statutes, financial institutions could become subject to requirements that collectively jeopardize America’s security and the continued stability and safety of national banks.”
The Treasury and lawmaker analysis of the bill makes clear that this legislation will impact both the financial services available to consumers and our broader economy and the safety and security of the U.S. financial system.
Tennessee recently enacted a similar law, and measures have been proposed in other states like Arizona, Georgia, Kentucky and Louisiana. Legislation like this is part of a broader political attack on environmental, social and corporate-governance (ESG) policies, and oftentimes, these are based on false narratives for the benefit of campaign talking points. Unfortunately, the bill can be more harmful than good.
This is not the only consequence of Florida’s bill. Business leaders have expressed concern that additional bureaucratic red-tape and duplicative regulations on banks will increase costs on consumers and deter financial institutions from expanding business in the Sunshine State.
What’s more, the bill requires that state officials investigate any complaints where someone “suspects” a violation, opening the floodgates to frivolous claims that will put new financial burdens on thousands of American businesses. This bill is just the latest in a series of anti-business policies that conflict with traditional, conservative free-market principles.
2 comments
rick whitaker
August 2, 2024 at 11:15 am
rule of thumb, if the southern states are for it, it’s bad.
Jojo
August 2, 2024 at 11:54 am
Rule of thumb… if DeSantes thinks he can stick it to the libs he’s going to do it, consequences be damned.
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