Florida Banking April 2023

GOVERNMENT RELATIONS

FLORIDA’S 2023 LEGISLATIVE SESSION: EVERYTHING, EVERYWHERE ALL AT ONCE

BY ANTHONY DIMARCO, FBA EXECUTIVE VICE PRESIDENT AND DIRECTOR OF GOVERNMENT AFFAIRS

Y es, this is the title to an Oscar-winning movie, but it is also the self-claimed theme of the 2023 Session. This year’s Session will have begun by the time you read this article, with the House and Senate convening on Tuesday, March 7, and welcoming the Governor to give his State of the State Address in a joint session in the House. Much like in Washington, D.C., the Governor will have laid out his agenda for the Session. The Legislature will then begin to debate his agenda and push their own independent agendas, plus bills filed on behalf of different special interest groups. I think this Session will have a deep impact on our industry, maybe not for the better, and will require the FBA and its members to fight off more than a few far afield ideas. Here are some of the ideas we will be encountering this Session: ESG House Bill 3 by Rep. Bob Rommel (R-Naples) and SB 302 by Sen. Erin Grall (R-Ft. Pierce) is Florida’s attempt to curtail perceived “wokeness” in the business community. Unfortunately, a big portion of the bill deals with banking practices. Among other provisions, the bills create a new “unsafe and unsound banking practice” to be applied to any bank that is a qualified public depository (QPD) or to any Florida state-chartered bank or credit union. The bill, while recognizing the need for financial institutions to provide or deny banking services based upon an analysis of risk factors unique to each individual customer, provides that it is deemed an unsafe and unsound banking practice to discriminate against a person based upon the following: • Their political opinions, speech, affiliations, religious beliefs, exercise or affiliation; • Any factor that is not a quantitative, impartial and risk-based standard;

• Any factor that includes the person’s business sector, e.g., fossil fuels or gun manufacturing; or, • Any rating, scoring, analysis or the like based on a “social credit score.” The financial institution, beginning on July 1, must attest, under penalty of perjury, that it is in compliance with this new law. If you are a Florida state-chartered financial institution you are subject to the following penalties: • It is deemed a violation of the Florida Financial Institutions Code and you are subject to the applicable penalties; • You are in violation of the Florida Deceptive and Unfair Trade Practices Act (FDUPTA), from which you are currently exempt; and • Potential perjury charges when signing the prescribed compliance form. Lastly, for Florida state chartered financial institutions, OFR may not use the “wild card” statute in relation to this new section of law. The same unsafe and unsound practice requirements apply to all QPDs, but the penalties and enforcement are different: • If the CFO determines that the attestation is materially false, he shall report this to the Attorney General. She in turn may bring civil or administrative action for damages, injunctive relief, or any other appropriate relief and if she is successful, is entitled to reasonable attorneys’ fees and costs; • The CFO may suspend or disqualify any QPD for a violation; • Failure to file the required attestation is deemed to be a knowing and willful violation; and • The CFO may bring all current penalty provisions of the QPD statutes such as, cease and-desist order, corrective order, and the like. The bill also has the same language for unsafe and unsound practices for consumer finance companies and money services businesses.

16 — FLORIDA BANKING THE VOICE OF FLORIDA BANKING