Over the past decade or so we’ve seen a number of major players in the financial industry decide to stop doing business with gun companies that don’t accept the banks’ corporate gun control mandates, as well as attempts by Democratic administrations to weaponize the power of the federal government to push banks in that direction through things like Operation Choke Point.
Starting last year, however, we started to see some push back on the part of red states, with Texas passing a new law barring banks that discriminate against the firearms industry from taking part in the state’s municipal bond market. While the Lone Star State might have been the first to take that step, the idea is becoming more popular in many Republican-controlled legislatures.
A law that took effect Sept. 1 in Texas prohibits governmental entities from entering into contracts with businesses, including banks that underwrite bonds, unless there is written verification in the contracts that their policies do not result in the refusal or termination of services for any firearm entity or trade association.
Similar bills have been introduced in Arizona, Indiana, Kansas, Kentucky, Ohio, Oklahoma, and West Virginia, according to Mark Oliva, public affairs director at the National Shooting Sports Foundation, a firearm industry trade association, who said the measures are focused on the muni market.
“We’re actively working in these states to get laws like this to end discriminatory practices against the constitution,” he said. “Our industry, the firearm industry, is a constitutionally protected industry. Firearm manufacturers are doing everything in accordance with the laws.
What you’re seeing is corporate activism from the boardroom.”
Even in red states, however, the legislation is meeting with some resistance from Republicans who say that blocking banks from the municipal bond market over their discrimination against the firearms industry goes against their free market ideology. While a half-dozen states have introduced similar legislation this year, so far none of them have gotten out of their house of origin.
Even in Oklahoma, where lawmakers have approved Constitutional Carry and Second Amendment Sanctuary laws in the past two years, a bill targeting anti-gun banks is meeting with stiff resistance.
Oklahoma House Bill 3144 won approval from the chamber’s Public Safety Committee on a 5-2 vote earlier this month. A summary of the measure said it “provides that a governmental entity may not enter into a contract with a company for the purchase of goods or services unless the contract contains a written verification from the company that it does not have a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association and will not discriminate during the term of the contract against a firearm entity or firearm trade association.”
Adrian Beverage, president and CEO of the Oklahoma Bankers Association, said the group is not supportive of the current language in the bill.
“We continue to work, however, with all parties involved as the process continues,” he added.
State Sen. Casey Murdock, the bill’s Senate sponsor, said while “big power banks with all the money are stifling business,” the measure faces an uphill battle. “It’s got a lot of heavy hitters that are going to be fighting this. All good legislation that’s actually accomplishing something takes a couple of years to get it passed,” he added.
There’s also some question about how effective these laws actually are in terms of changing bank policy. Citigroup, for instance, declared to Texas that it does not have any policies in place that discriminate against the firearms industry, and has been allowed to take part in the municipal bond market despite drawing complaints from the NSSF, which alleges that Citigroup is deceiving the state about its practices.
NSSF filed a complaint with Texas Attorney General Ken Paxton over the bank’s winning bid of a $26-million bond issue for a Texas public school district last year, arguing that the financial giant has done nothing to demonstrate it has actually rescinded its rules restricting some financial services to gun companies and firearms retailers. Despite the law, that deal was completed late last year, and according to BondBuyer.com the company has since won bids on at least two other bond issues valued at more than $100-million.
If the Texas law isn’t living up to its billing, then it stands to reason that Republican lawmakers may be a little gun-shy (no pun intended) about putting similar laws in place in their own states. These bills are already meeting with opposition from big banks and Chamber of Commerce conservatives, and the mixed results that we’re seeing where the law is already on the books could give even sympathetic lawmakers an excuse to bottle these bills up in committee while the issue is “studied” for another year.
I think the intention behind these bills is good, but if the law is toothless then the intent doesn’t matter much. It may be that the current spate of legislation could use some tweaks to make them more effective, but I don’t believe that Republicans should give up on these measures or give anti-gun banks a pass on discriminating against the American firearms industry.
