The failure of Silicon Valley Bank (SVB) is an example of the harmful effects of the Biden Administration’s “attempts to harness the federal financial regulatory apparatus in service of left-wing political goals,” 16 state attorneys general (AGs) wrote to top administration officials this week.

The letter, sent to the heads of the Treasury Department, Federal Reserve, FDIC, and the office of the Comptroller of Currency, demands that the Biden administration halt the politicization of the banking industry through climate-related regulations and instead focus the regulatory agencies on true risk management.

“SVB’s failure is a warning sign that the administration’s environmental activism in its financial regulation not only ignores real financial risk but increases it,” one signee, Utah Attorney General Sean D. Reyes said in a statement. “The administration should refocus regulation on true risk and stop pressuring financial institutions to meet impossible net-zero targets.”

Regarding the failure of the Silicon Valley Bank, the AGs say they’re concerned that the Biden Administration’s decision to guarantee all deposits at SVB - even those that were not insured – appears to be a politically-motivated attempt to “provide financial support to an important constituency that did not exercise proper vendor oversight.”

The AGs cite SVB as a perfect example of the danger of the Biden Administration’s “regulatory posture of viewing climate change as the leading risk to the finance industry, and as a ripe business opportunity.”

“SVB appears to have been focused more on environmental issues than safe and sound operations, which is perfectly consistent with your regulatory approach,” the AGs write, denouncing the Biden Administration’s regulatory agencies for:

“Attempting to use the financial system to pursue environmental goals does nothing but increase risk,” the letter explains:

“For example, banks that refused to do business with coal companies, but rushed to partner with green technology companies, made the wrong bet over the past two years, as coal company cash flow has skyrocketed while rising interest rates have exposed the weakness in many green energy business models.”

In conclusion, the AGs call on the Biden Administration officials to immediately take three corrective actions:

“You should publicly direct banks to pursue profitability, liquidity, and prudent risk management and note that declining to serve customers for failing to comply with unrealistic climate initiatives like achieving net zero by 205022 is a threat to the financial system.”

“You should make clear that no agency, nor any agency personnel, has authority to pressure any bank to increase its exposure to net-zero compliant customers or to decline to do business with companies for not being net-zero compliant.

“You should also direct banks to stop setting emissions reductions targets that are inherently arbitrary and undermine public confidence in the financial system.”