A Florida law that prohibits federal and state depository institutions conducting business in the state from denying services based on religion or political beliefs and activities went into effect on July 1.
State law already prohibited state-chartered financial institutions from denying services based on those issues.
The legislation, HB 989, was passed by the Florida Legislature earlier this year and was signed by Gov. Ron DeSantis in May. “We are not going to allow big banks to discriminate based on someone’s political or religious beliefs, and we will continue to fight back against indoctrination in education and the workplace,” DeSantis said, as he signed the bill.
The law creates a new “unsafe and unsound practice” that prohibits federal and out-of-state financial institutions from “denying or canceling financial services to a person, or otherwise discriminating against a person in making available such services or in the terms or conditions of such services,” on the basis of a person’s:
- Political opinions, speech, or affiliations;
- Religious beliefs, religious exercise, or religious affiliations;
- “Any factor if it is not a quantitative, impartial, and risk-based standard, including any such factor related to the person’s business sector;”
It also prohibits the “use of any rating, scoring, analysis, tabulation, or action that considers a social credit score based on factors, including, but not limited to, a person’s: political opinions; religious beliefs; lawful ownership of a firearm; engagement in the lawful manufacture, distribution, sale, or use of firearms; engagement in the exploration, production, utilization, transportation, sale, or manufacture of fossil fuel-based energy, timber, mining, or agriculture; support of a state or federal government in combatting illegal immigration, drug trafficking, or human trafficking.”
Notably, the law also creates a process for customers who suspect there has been a violation to file a complaint with the Florida Office of Financial Regulation (OFR). The customer must file that complaint within 30 days and the office is required to notify the financial institution, which then has 90 days to respond. The OFR is required to start its investigation within 90 days of receiving the complaint and to create a report of its findings within 30 days after the completion of its investigation. OFR is required to send a report to the customer and financial institution within 45 days after the completion of the investigation.
If OFR finds a violation, the office is required to notify the state Department of Financial Services, as well as the Florida Attorney General. A financial institution may be fined if it is found to have violated the law and it may be deemed to have violated the Florida Deceptive and Unfair Trade Practices Act, which also provides for sanctions and penalties.
It is unclear if the law applies to an out-of-state financial institution with customers in Florida but with no physical presence in the state. It also is not clear whether any customer may file a complaint or if the customer must be a Florida resident.
But there are fines and penalties for noncompliance and a financial institution violating the law may also be deemed to have violated the Florida Deceptive and Unfair Trade Practices Act, which also provides for sanctions and penalties, plus, if the Attorney General successfully sues the institution, the recovery of attorney’s fees and costs as well.
Florida state officials said that financial institutions that are not clear about the applicability of the law must file a petition for a declaratory statement with the state Office of Financial Regulation.
Several states have enacted laws intended to prevent financial institutions from discriminating against people engaged in certain activities. For instance, a 2021 Texas law prohibited municipalities from conducting business with financial institutions that discriminated against gun-related businesses.
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