PNC, ESG & Florida’s Next Move to Preserve Financial Freedom – Top 3 Takeaways – March 6th, 2023
- If they can do it to Jr. they can do it to you. So last week Donald Trump Jr.’s corporate bank account for MxM News with PNC Bank was closed. The way this was discovered by Jr.? Not by official communication. Not with a heads up it was happening. But rather when a partner in the company went to a PNC branch to make a deposit. Imagine going to your bank to make a transaction and being told your account no longer exists. Fun right? And the closure of MxM’s account was so official, a cashiers’ check with the account balance of approximately $750,000 was being sent to them. When a representative for Jr.’s company inquired as to the reason, PNC cited a clause in their terms and conditions allowing them to do so at any time without reason. Now is this type of policy common among banks? Yes. Are accounts regularly closed by PNC and other banks with little or no advance notice? Yes. But is there causation? Always. You might imagine that given that a bank is in the business of transacting in money, they tend to want as much of it deposited with them as possible. This isn’t complicated. So, when accounts are abruptly closed there’s always a reason. Here are the eight most common. 1) Dormant accounts, 2) Zero Balance, 3) Bounced checks/overdrawn accounts, 4) Excessive transfers between accounts 5) Identity theft, 6) Criminal conviction 7) High risk businesses (historically businesses which may be legal at the state level but not federally IE medical marijuana) 8) Material changes at a bank (IE merger, bankruptcy, etc.). None of those applied in the case of MxM. So what happened here?
- A good faith error. Yep, simply a case of uh...sorry. So sorry, our bad, you see it was a thing with a thing and well, you know...sorry. After Donald Trump Jr. came public with what happened and stories poured in from PNC customers who were closing their own accounts and taking their business elsewhere in response, they reversed course, stating they were reopening the account. Quoting PNC in an official response: Account closures can occur for a variety of reasons but are never influenced by the political views or affiliations of our customers. We’ve looked closely into the circumstances surrounding the closure of the ROCDIGITAL, LLC account and determined it was mistakenly closed due to a good faith error. We have reopened the account and we apologize for any inconvenience. I wasn’t born yesterday, and neither were you. Now, here’s the first thing. If PNC Bank is so incompetent that they can accidentally shutter a business bank account that’s in good standing with significant funds, well, it doesn’t sound like the best place to be banking to say the least. And that’s the best-case scenario presented in this situation. But let's have a “get real” moment for a moment, shall we? Every transaction of $10,000 or more gets extra scrutiny by banks, as mandated by law, and are reported to the federal government as is mandated under law. We’re to believe a $750,000 transaction and subsequent account closure fully facilitated by the bank wasn’t meaningfully scrutinized? And try asking a commercial seller at any bank how valuable it is to them to add a business bank account which houses three-quarters of a million dollars (which has steadily been growing). But remember...it was all just a good faith error and perhaps...
- PNC’s ESG initiative and current ESG Director are just a coincidence too? Like many woke corporations, PNC has fully embraced ESG. So much so that they now have a full ESG division at the bank which drives its ESG related policy. As PNC’s ESG Director Laura Phillips laid out last September: We look for the intersection of the issues our stakeholders care about with those that are core to PNC’s business and those issues that we can make meaningful progress against. The ESG team works with subject matter experts across the bank to tell their stories in ways that resonate with investors, activists and all kinds of stakeholders who have an interest in how PNC is managing this complicated, interconnected mix of issues in ways that make a difference. We’re constantly scanning the ESG landscape to understand what issues are important to our stakeholders. We do this in many different ways, including conversations with our investors and advocacy groups focused on a variety of issues, from climate change to diversity and inclusion to financial inclusion, and many other topics. Now if PNC is “constantly” involved with ESG activists and are setting corporate policy based upon those conversations and positions of advocacy groups, we’re to think this is entirely unrelated to the “good faith error” of Don Jr.’s company? And we’re to think that this type of policy wouldn’t in any way be used punitively against individuals or companies which don’t adhere or believe in the ESG policy which is actively being pushed internally by PNC? The bank is evidenced in the MxM example as being either incredibly incompetent, dishonest or both. But what this matter raises is larger than PNC. Any woke banks could do stuff like this at any time to inhibit the ability for businesses or individuals to financially operate. It's why it’s important Florida passes the bill currently being championed by Governor DeSantis which would ban ESG related banking policy decisions in Florida. Ironically it was just on February 13th in which DeSantis said this: Today’s announcement builds on my commitment to protect consumers’ investments and their ability to access financial services in the Free State of Florida. By applying arbitrary ESG financial metrics that serve no one except the companies that created them, elites are circumventing the ballot box to implement a radical ideological agenda. Through this legislation, we will protect the investments of Floridians and the ability of Floridians to participate in the economy. Predictably the political left, which includes much of the news media, chalked this up as unnecessary culture war material. Just over two weeks later we saw a prime example of a prominent Palm Beach County resident’s business being caught in the crosshairs...of a “good faith error”.