Today’s bonus newsletter is written by Jason Garcia, an amazing corporate-accountability reporter who focuses on Florida. He also has his own newsletter, Seeking Rents. For more of Jason’s indispensable reporting, subscribe. Flogged on by Florida Gov. Ron DeSantis, state lawmakers in Tallahassee are plowing ahead with a bill this session that is meant to stop banks and investment managers from thinking about things like carbon emissions, worker pay and executive diversity when deciding where to invest money.
The Faustian bargain between the GOP and its voters is: we'll help our rich supporters get richer via regressive tax policies, deregulation, and hypocritical veneration of the free market, and we'll feed red meat to our poor voters by fighting the culture war on every front.
For as allegedly "smart" as DeSantis is, I don't think he understands his role, and doesn't seem to realize he's not supposed to interfere with the money making machinery. I'm cautiously optimistic he's going to blow himself up when he hits the national stage, and I'm not known for my optimism. Fingers crossed.
H.L. Mencken was quoted as saying “A democracy is where the middle class knows what it wants and gets it, good and hard”.
The joke is on Florida in so many ways but it is deserved nonetheless. A few years back the legislature passed regulations that limited how much insurance companies could charge in premiums. The result was that major insurers quit the state and those that are left are increasing premiums over 50% year over year. Now one can say, the insurers deserve it but the reality is changing weather patterns are increasing the frequency and severity of storms and thus claims. Anyway chasing banks out only increases costs for the Florida residents, Texas is finding that out as well. The voters are too stupid to recognize when their pockets are being picked so I say “let ‘em have it”. Its what I call the hidden income tax of a tax free state.
Thanks for the bonus newsletter.
It’s not hard to see a situation where the public entities in Florida find themselves unbanked. In the state where I live, there are more than a few banks who do not handle public funds because of the regulatory requirements. Have Florida legislators thought through what happens if the big banks simply decide that the regulatory hurdles are not worth the deposits they gain and small community banks are driven out of business by excessive compliance costs?
I’m a shareholder of a small community bank that lends to the fishing industry along Florida’s Forgotten Coast - Apalachicola to Pensacola. My customers would revolt if the bank lent to oil interests - think Deepwater Horizon oil spill. Under this legislation, the bank could be sued for fraud under this hypothetical.
Part of me thinks we give DeSantis too much credit for strategy. It seems like he’s following a playbook written by someone else to test how far he can get with anti-woke laws, and this is the banking chapter that conveniently coincides with SVB. Anyway ... I was glad to read that a Florida court upheld the stay on at least some of the extremes imposed on public colleges and universities. We need so much more coverage of the people pushing back.
What a surprise: whether we're talking customers or pregnancies, DeSantis and crew don't want any entity except themselves to have the right to choose.
Thanks for the crackerjack reporting.
Thanks for this, Jason. If this bill passes I'm rooting for a big bank exodus from FL!
I'd caution anyone from thinking too hard about the downstream effects from stuff like this on the banking industry, finance's contributions to Republicans, etc. It's performative. It very well might never be enforced, but it sends a message that big business is the enemy *as long as they aren't serving Republican interests.* Meanwhile the biggest and most important banks know they're already too big to fail and too big to regulate. This is about the base, and everyone will forget it in a few months as they move on from "woke banks" to "woke jails" or "woke PMCs" or something more nonsensical
The republicans say they are for deregulation yet they would be regulating banks and businesses ever more tightly with this legislation. Voters, for the most part, are going to see what’s happening here and are not going to let this slide quietly. I would not live in Florida if someone like De Santis (Putin) was governor.
I'd be curious to see how much tourism is being affected by Blue staters being less enthusiastic about going to Red states.
I can say it definitely effected some potential vacation plans my wife and I considered.
Hard to imagine having a good time there.
This is what I have been waiting for! Thank you for following the money. DeSantis and his mob ties family wife are destroying Florida and I have had enough!
I appreciate this reporting. This bill truly seems like overreach and reeks of hypocrisy. That said, I am trying to fully understand the wider issues as well. While I am vehemently opposed to private prisons, I am not informed enough to understand how Wells Fargo and others can legally refuse to do business with them.
First they came for the teachers, professors, and librarians.
Next they came for the GLBTQ folk.
Now they're coming for the bankers.
Every day, Gov. Destructo reveals more and more that he is an authoritarian fascist,
but he hates all the same people his followers hate, so they love him and ignore the growing danger.
By the time he comes for THEM, (and he will) it will be too late.
There will be no one left to stand up for them.
Republicons' blatant push for state control over private businesses is really quite amazing. I am still trying to understand it. The rationale pushed here makes a lot of sense.
Related-and-also-Important - @Jason: would love to see more (and more transparently) the ways that the DeSantis-connected campaign is being funded - beyond just banking. A FL-HQ'd utility (NextEra) - now has business contracts providing electricity to New-England/ Rhode-Island-based customers (along with less-favorable operating conditions) ... AND generating millions for GOP campaigns.
What the hey is a "business sector?" Would a bank be knocked off the approved list for refusing a loan to an "escort service.?" How about refusing to lend to a business dedicated to pro-choice advocacy? or to Disney or other businesses already on the Florida hit list? And are there going to be penalties for banks who turn down an objectively bad risk that happens to be in an also 'preferred" sector?
Who decides the reason the bank turns down lending to someone? How does the Florida government decide between someone being turned down for its "support of state government combatting illegal immigration" from being turned down for being bad PR for the bank? What happens when the customer is trying to combat LEGAL immigration?
Talk about "small government." Though of course, deSantos is far from the GOP idea of "small government" and "deregulation."
As far as ESG goes: were I in my 30s or 40s, I certainly wouldn't want my 401k to invest in an REIT that could only consider the value of waterfront property in Florida as it is now, rather than what that property might be worth by the time I retired.
Wells Fargo doesn't have to leave the state. It just has to stop making business loans there. Still take deposits and mortgages, but if you want a business loan, deal with Wells Fargo out of state. That's what folks needing an abortion need to do. Why not folks who want bank loans? (Tongue in cheek here; I know that's not practical.).
This is all just virtue signaling. That's all deSantos cares about.