AP Photo/Julie Jacobson
For the last year, we’ve had story after story of gun companies running into problems. Time after time, their banks are turning their backs on customers, often long-time customers, as the two industries seem to be engaged in a constant struggle.
Part of that struggle comes from New York Governor Andrew Cuomo, a man who has been abusing his power as governor of the state where most banks are headquartered, to pressure banks into issuing new requirements that cut to the heart of the firearm industry.
Now, the Senate appears to be stepping in, and they’re not big fans of what the banking industry is pulling.
The chairman of the Senate Banking Committee warned the banking industry on Thursday that it should not attempt to restrict legal gun sales by denying financial services to members of the gun industry.
Sen. Mike Crapo (R., Idaho) sent a letter to eight of the country’s biggest banks detailing his concerns with the way some of them had begun rejecting business from certain gun companies. In the last year, several of them have attempted to restrict what kinds of guns can be sold to the public and who they can be sold to by applying financial pressure.
Bank of America announced last year it would deny services to companies that produce “military-style firearms.” Around the same time, JP Morgan Chase said it would limit its business with gun companies. Citibank went further by declaringit would not do business with any company that sells what they called “high capacity” magazines or that sells firearms to adults between the age of 18 and 21.
Wells Fargo has faced similar pressure from gun-control groups over the same period of time but has thus far bucked the trend and refused to deny business to gun companies.
Crapo said banks shouldn’t try to limit legal businesses using their financial resources.
“Banks serve customers who are geographically and politically diverse, and it is wrong to use essential banking services as a way to choke off such services to lawful, creditworthy businesses,” Crapo wrote in his letter. “Large banks, which receive significant forms of government support and benefits, should continue to provide credit and services to customers and companies that comply with federal and state law and should not seek to replace legislators and policymakers. Business lending decisions should be based on creditworthiness, rather than politics or political pressure.”
Crapo’s comments come on the heels of senators Kevin Cramer (R., N.D.) and John Kennedy (R., La.) introducing S821, the Freedom Financing Act. They said the legislation would keep banks with resources of $10 billion or more from denying business to gun companies.
Honestly, Crapo is 100 percent correct.
Unfortunately, his comments don’t cut to the heart of the problem. Instead, what we have is an industry caught between a rock and a hard place. On the one hand, they face a governor who has an oversized influence on the financial industry telling them to do these things. On the other, they have a senator with similar influence over the industry telling them the opposite.
They’re not getting any sympathy from me, though. After all, Cuomo can’t really force regulations down their throat that extend beyond the borders of New York. They made that decision. They’re free to do as the governor wants within the state. That would be an understandable response to Cuomo’s threats and pressure.
But that’s not what they’ve been doing. Instead, they’ve been choking off lawful businesses, making it virtually impossible for these companies to function. Most importantly, they’ve been doing it regardless of geography.
If their butt is in a crack, they’re the ones that put it there, so I’m just going to sit back and smile.