GOP Banking chair pushes Bank of America, Citigroup on gun policies

GOP Banking chair pushes Bank of America, Citigroup on gun policies
© Greg Nash

The chairman of the Senate Banking Committee is pressing Bank of America and Citigroup for details on their plans to implement new policies restricting business with firearms manufacturers.

Sen. Mike CrapoMichael (Mike) Dean CrapoBanking panel showcases 2020 Dems On The Money: Why the tax law failed to save the GOP majority | Grassley opts for Finance gavel, setting Graham up for Judiciary | Trump says China eager for trade deal | Facebook reeling after damning NYT report Senate GOP readies for leadership reshuffle MORE (R-Idaho) on Tuesday sent letters to Bank of America CEO Brian Moynihan and Citigroup CEO Michael Corbat on Tuesday expressing concern with their decisions to limit their ties to gunmakers.

“It is deeply concerning to me when large national banks ... 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,” Crapo wrote.

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Citigroup announced in March that it will start requiring clients to place some restrictions on gun sales, including banning the sale of firearms to anyone under the age of 21. The bank will also require retail clients to only sell guns to individuals who have passed a background check and ban businesses that sell bump stocks or high-capacity magazines.

Anne Finucane, Bank of America’s vice chairwoman, said earlier this month that the bank will not “underwrite or finance military-style firearms” and has told a number of gun manufacturers that it will no longer do business with them.

The moves came amid growing pressure on U.S. corporations and the financial services sector to cut ties with gunmakers after the school shooting in Parkland, Fla.

The massive power and influence of major U.S. banks, coupled with the federal government’s extensive involvement in their space, has raised alarm among GOP lawmakers.

“I am concerned when government agencies use their power to try to cut off financial services for lawful business they may disfavor,” Crapo wrote. “I am also concerned when large national banks use their market power for similar purposes.”

Banks must receive a federal charter to operation nationwide, and benefit from the backstop of Federal Deposit Insurance Corporation, which insures deposits of up to $250,000 per account.

Republicans have bristled at banks’ attempts to freeze out gunmakers for those reasons, and cite their begrudging support of the massive 2007 bailout spurred by risky financial practices at the most influential firms.

“We should all be concerned if banks like yours seek to replace legislators and policymakers and attempt to manage social policy by limiting access to credit,” Crapo wrote.

Crapo also pressed the banks on how they would collect and use personally identifiable information to implement the policies, other industries they plan to freeze out, and who was consulting in crafting these plans.

Other Republicans on his committee have taken more drastic measures to hold banks accountable for their embrace of gun control oriented policies.

Sen. John KennedyJohn Neely KennedyMORE (R-La.) has vowed to oppose a bill that would clarify and ease the requirements of the “Volcker rule” banning banks from making risky proprietary investments. He also pressed Federal Reserve Vice Chairman for Supervision Randal Quarles on whether the Fed could step in to prevent banks from impeding on Second Amendment rights.

“We do not need red banks and blue banks,” Kennedy said at a Banking Committee hearing.

“We need banks that are safe and sound and honest and appreciative when the American taxpayer puts up billions and billions of dollars of their hard-earned money to prevent these banks from going belly-up.”

Quarles replied that it’s not appropriate for the Fed to tell banks what lines of business to conduct, but that the board would have to intervene if a law was being violated.