State AGs Criticize Janet Yellen for “Fearmongering” on De-Banking Bans

20 attorney-generals from Republican states have penned a letter addressed to US Treasury Department Secretary Janet Yellen, in protest of the Treasury’s apparent push to stigmatize anti-de-banking laws as “harmful to national security.”

We obtained a copy of the letter for you here.

The signatories, led by Florida AG Ashley Moody, cited the Treasury’s recent letter that went after those states that either have or are preparing to enact laws aimed at protecting clients from de-banking.

The Treasury’s letter (sent by Undersecretary Brian Nelson), they write, was critical of laws like Florida’s HB 989, designed to prevent banks from denying financial services “based on factors that are not grounded in measurable risks.”

Previously, the Treasury prohibited banks from doing this, except in cases when a client was documented as unable to meet quantitative, impartial risk-based standards.

“Importing political activism into financial regulation” is how the Republican AGs now describe this marked shift in policy.

The AGs see opposition to said legislation as the Treasury ignoring its statutory role and serving instead to promote the Biden-Harris Administration’s campaign described as radical and fearmongering and meant to advance “activists’ extreme agendas” while sowing confusion about the purpose and nature of those state laws.

According to the letter, that purpose is to promote “responsible money management and protecting consumers from discrimination.”

But the Treasury’s meddling – bringing up national security in this context in order to allow large financial institutions and banks to abuse power – is advancing the political goals of “activists,” the AGs claim.

The activists here would be anti-conservative ones, those trying to remove access to bank services to gun manufacturers, among others.

Undersecretary Nelson’s letter made the assertion that state laws to prevent such policies by financial institutions are “interfering” with the ability to “comply with national security requirements.”

Nelson went on to claim that the legislation he singled out meant “heightened risk” of international drug traffickers, transnational organized criminals, terrorists, and corrupt foreign officials using the US financial system to not only threaten national security but also “launder money, evade sanctions.”

The Treasury has since said that this was a reaction to a “bipartisan letter from members of Congress” who expressed these concerns and that this department agrees with their stance on the issue.

But the AGs say that Nelson’s letter “deliberately misleads financial institutions about these state laws, for example, by falsely suggesting that laws such as Florida’s HB 989 would prohibit financial institutions from considering whether a consumer is associated with designated terrorist groups.”

The letter concludes that the signatories “join with the majority of Americans in looking forward to the day when federal regulators will focus on their statutory duties, rather than on advancing radical political causes and stoking unfounded fear about state laws.”

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