Washington, D.C. – The United States Treasury Department recently issued a national security warning against one of the most prolific shades of anti-ESG legislation to emerge in 2024, citing its “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.” Often introduced as the “Equality in Financial Services Act,” this legislation model weaponizes the definition of ‘discrimination’ to force the hands of financial institutions to provide services to entities that may not meet risk assessment criteria, exposing America’s financial institutions to significant liabilities. Right now, it’s law in Florida, but according to a new report from Pleiades Strategy, lawmakers across 14 states have attempted to pass 23 lookalike bills with almost identical language.
“State legislatures across the country are undermining national security in order to fight their so-called anti-woke culture war,” said Unlocking America’s Future Spokesperson Kyle Herrig. “By bending to extremists, state politicians show they are only concerned with scoring political points with wealthy special interests. Research shows that responsible investing is good for transparency in the financial system, our environment, and the economy.”
Shortly after the Treasury Department issued its warning, 20 attorneys general from top anti-ESG states including Texas and Florida doubled down on the model legislation in a letter and criticized Secretary Janet Yellen for using a “radical approach.”
According to the Pleiades report, the largest supporters of this bill model are widely recognized “anti-woke” activists, known for their shady ties and extreme views.
- This includes organizations such as the Opportunity Solutions Project, the lobbying affiliate of the Foundation for Government Accountability, and the Alliance Defending Freedom, a homophobic Christian nationalist group condemned by the Human Rights Campaign and GLAAD.
Laws like these could force banks to finance designated hate groups.
- One of the top advocates for “Equality in Financial Services” proposals has been the Alliance Defending Freedom (ADF). ADF is considered a Christian nationalist group and designated as a hate group by the Southern Poverty Law Center. While large donor-advised funds associated with major financial institutions have been pressured to stop financing groups like ADF, these bills could require asset managers to provide services to ADF and other recognized hate groups.
Responsible bankers and financial institutions largely oppose these bills.
- Business advocates in states like Tennessee and Arizona have spoken out against these bills, saying they could lead to frivolous and costly litigation. In Indiana, a representative of the Indiana Bankers Association warned legislators that the proposed Equality in Financial Services Act “takes a sledgehammer” to banks’ ability to navigate risk assessment.
Existing anti-ESG laws in states like Texas and Oklahoma have cost taxpayers hundreds of millions of dollars in increased costs and lost economic activity.
