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FL’s Broad Anti-ESG Law, Feds’ Take on Bank Failures & More

May 05, 2023 (2 min read)

FL Enacts Broad Anti-ESG Law

Florida Gov. Ron DeSantis (R) signed a bill (HB 3) opposing the consideration of environmental, social and governance (ESG) factors with respect to the management of state and local funds. The measure codifies rules DeSantis formalized in January banning state asset managers from taking ESG factors into account when investing public money.

The measure also prohibits consideration of ESG factors by state and local governments when issuing bonds or procuring or contracting for goods and services. In addition, the measure bars banks that participate in “corporate activism” from serving as qualified public depositories and bars financial institutions from discriminating against customers on religious, political or social grounds, including their ownership of a firearm or support for controlling illegal immigration. (LAW 360)

Feds Weigh in on Recent Bank Failures

In a report issued on April 28 the Federal Reserve took at least some of the blame for the failure of Silicon Valley Bank, saying the bank’s failure demonstrated “there are weaknesses in regulation and supervision that must be addressed.”

“Regulatory standards for SVB were too low, the supervision of SVB did not work with sufficient force and urgency, and contagion from the firm’s failure posed systemic consequences not contemplated by the Federal Reserve’s tailoring framework, the report said.

But the report also stated: “Silicon Valley Bank (SVB) failed because of a textbook case of mismanagement by the bank. Its senior leadership failed to manage basic interest rate and liquidity risk. Its board of directors failed to oversee senior leadership and hold them accountable.”

In a separate report issued on the same day, the Federal Deposit Insurance Corp. suggested possible reforms to deal with concerns raised by the recent bank failures. One of those potential reforms would be removing the FDIC’s current $250,000 insurance limit on certain types of accounts, such as those for businesses. (LAW360)

FL Approves AOB Ban for Windshield Repairs

The Florida Legislature passed a measure (SB 1002) that, if signed by Gov. Ron DeSantis (R), would bar assignments of benefits for windshield repairs. The bill would also prohibit windshield repair shops from offering customers gifts and prohibit insurers from “steering” insureds to preferred repair shops. But the measure would allow insurers to offer premium discounts to customers who purchase policies with managed repair plans. (INSURANCE JOURNAL, STATE NET)

—Compiled by KOREY CLARK

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