By Russ Thurman
The battle within the financial world continues to heat up. Investment institutions, credit card companies and banks are facing increased demands to stop doing business with the “gun industry,” while others are seeking new ways to hamper the industry’s commercial activity.
Following the horrific shooting at the Parkland, Fla., school in February, Citigroup announced new restrictions on firearm dealers, and Bank of America (BofA) said it would not lend to manufacturers of “military-style firearms for civilian use.”
In April, the American Federation of Teachers (AFT) made demands of Wells Fargo.
“We’re issuing Wells Fargo an ultimatum — they can have a mortgage market that includes America’s teachers or they can continue to do business with the NRA and gun manufacturers. They can’t do both,” said Randi Weingarten, AFT president.
Wells Fargo refused to submit. Timothy Sloan, CEO, in a letter to Weingarten, wrote, “We believe the best way to make progress on the complex issues concerning gun violence is through the political and legislative process in which all citizens have the opportunity to participate.”
New York State, which has directed its governmental powers at the industry in the past, continued its strong-arm tactics. Mid-April, in response to a Gov. Andrew Cuomo directive, Department of Financial Services Superintendent Maria Vullo, according to the New York Daily News, said her department “… urges all insurance companies and banks doing business in New York to join the companies that have already discontinued their arrangements with the NRA, the gun industry or other promoters of guns, and to take prompt actions to manage these risks and promote public health and safety.”
In response, Hornady Manufacturing fired back.
“Today, the State of New York did one of the most despicable acts ever perpetrated by any state by asking New York banks, financial institutions and insurance companies to stop doing business with the gun and ammo industry,” said Steve Hornady, company president.
“While it may not make a difference to New York, Hornady will not knowingly allow our ammunition to be sold to the Government of the State of NY or any NY agencies. Their actions are a blatant and disgusting abuse of office and we won’t be associated with a government that acts like that. They should be ashamed.”
New York’s not-so-veiled threat and the actions of Citigroup and BofA did not go unnoticed on Capitol Hill. In April, Sen. Mike Crapo (R-Idaho), Senate Banking Committee chairman, wrote letters to both banks, questioning their tactics.
“It is deeply concerning to me when large national banks like Citigroup [Bank of America], which receive significant forms of government support and benefit, use their market power to manage social policy by withholding access to credit to customers and companies they disfavor,” he wrote.
In reference to New York State’s campaign, Sen. Crapo cited “Operation Choke Point,” the Obama-era program the Department of Justice declared “inappropriate.”
“Now, the Superintendent of the New York State Department of Financial Services is warning banks and insurers against doing business with the firearms industry and the NRA. This raises concerns New York is trying to implement its own version of Operation Choke Point,” Crapo continued.
If all this isn’t troubling enough, The Wall Street Journal in late April reported numerous banks and credit card companies are exploring ways to track firearm purchases. These include the possibility of a credit card code for firearm dealers. There are, of course, concerns about how such data will be used, in addition to creating a mechanism for restricting sales.
“A bank could say, ‘We’re not going to do business with gun manufacturers,’” said Jeremy Stein, Harvard University economics professor and former member of the Federal Reserve board of governors. “But when it gets into using the information, you’re getting into the same issues Facebook and others had problems with.”
Call For Action
The actions within the financial world to hamper — even cripple — the industry are of great concern. While we’ve sounded a lot of calls for action, this one demands we all get involved.
A good place to start is your state and national legislators: ask them to counter any financial roadblocks directed at the industry. In addition, contact your personal banker with the same request, and in the case of Wells Fargo, thank them for holding the line. Finally, if your personal bank or investment institution is targeting the industry, perhaps it’s time you make a change — and let them know why.