Ron DeSantis Goes to Perilous Lengths to Politicize Banking In Florida

By John Tamny, Forbes

“We are not going to allow big banks to discriminate based on someone’s political or religious beliefs.” Those words come to us from Florida Gov. Ron DeSantis, amid his ongoing and rather puzzling war against business in his own state.

DeSantis was trumpeting his signing of an “anti-ESG” law in Florida which, according to a recent report in American Banker “provides an avenue of recourse for bank customers who believe they were denied financial services on the basis of their political opinions, religious beliefs, lawful ownership of guns or involvement in fossil fuel-based energy production.” More realistically, DeSantis’s grandstanding could have the unintended effect of politicizing the crucial flow of precious capital in a state that at least on the surface claims it’s pro-business.

Missed by DeSantis first and foremost is that banking is – and must be – religion, politics and color blind by design. This is particularly true in the days of 5%+ interest on deposits. As this piece is being written, the high cost of acquiring customer savings and accounts more broadly means that bank loans must perform more than ever. How else to profitably pay so much for the deposits that are the lifeblood of banks?

To then pretend, as DeSantis does, that banks would have the luxury of choosing customers who fit the “right” political or religious profile, or loan recipients based on their partiality to ESG (environmental, social and governance) notions, defies basic market logic. DeSantis, like all too many politicians, lacks essential private sector experience that would open his eyes to the folly of the legislation he supports.

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