With rising mass shootings, proponents of gun control are unsurprisingly increasing their fund raising to counter the enormous coffers of guns rights advocates. After the recent tragic mass shootings in Dayton, El Paso and Gilroy, gun control advocates, however, do not presently seem to be focusing as much as in the past on financial institutions that lend to or invest in ammunition and gun manufacturers, as well as those that contribute to gun rights advocates or politicians that are against gun control or background checks. To date, none of the large banks have curtailed their lending to gun manufacturers, ammunition producers, or retailers which sell guns including Walmart. Because of banks’ opacity, whether their private wealth or asset management divisions are investing in gun stocks or bonds is not known. A recent Morning Consult/Politico poll shows that respondents were less interested in admonishing or sanctioning banks that are involved with gun and ammunition companies than they are in background checks and red flag laws.
In February 2008, Think Progress identified over a dozen banks that finance gun and ammunition manufacturers. Since then various gun control advocates have been pressuring banks cut their ties to the gun industry.
Earlier this year, not-for-profit organizations Guns Down America, the American Federation of Teachers, Colors of Change, Newtown Action Alliance, Survivors Empowered, This is Our Lane, and the Violence Policy Center published “Is Your Bank Loaded?” The research piece, which studies America’s biggest banks, includes a score card that ranks banks “on financial relationships between banks and gun, ammunition and accessory manufacturers, financial relationships between the banks and the NRA or Gun Owners of America, sponsorships or member benefits provided to NRA members, statements by the banks regarding the need for stronger gun violence prevention laws, and campaign donations to the NRA’s Million Dollar Members.”
Of the 15 biggest banks by asset size, only Citibank received a B, the highest grade any bank received. BB&T, Chase, PNC, TDBank, US Bank Corp, and WellsFargo received the worst grade, an ‘F.’ To see the involvement of these banks in loans to or investments in the gun industry, you can click on the links above that lead you to more details.
State legislatures, however, are finding ways to pressure banks. Recently, California Assemblywoman Sydney Kamlager-Dove (D-Los Angeles) introduced a resolution to urge “banks that have open demand accounts with the state to evaluate their relationships with gun manufacturers and adopt lending practices that protect citizens before profits.” The resolution states the California has “demand accounts with six banks that concurrently lend to gun manufacturers, which are Bank of America, Citibank, JPMorgan Chase & Co., Union Bank MUFG, U.S. Bank, and Wells Fargo & Co.” According to Kamlager-Dove, “California has more gun laws than any other state in the union.” Hence, instead of proposing new laws, Kamlager-Dove’s resolution “intends to affect the proliferation of guns by urging six nationally chartered banks to curtail their relationships with gun manufacturers. If major banks refuse to extend credit to gun manufacturers, borrowing costs for gun manufacturers would likely increase, which could reduce industry investment in additional capacity or new business lines.” Moreover, “such a result could reduce the proliferation of guns not only in California, but also across state lines.”
When I interviewed, Kamlager-Dove, she told me that she sat with banks and bank associations in California “as a courtesy and to encourage their members to come to the table and partner with the state to expand solutions to the gun violence epidemic outside of using the penal code.” Even after devastating mass shootings, “firearms production continues. We have an overproliferation of guns,” she said. “Firearm companies still keep getting indebted, because they can borrow from banks.” She explained that in the past, companies and banks “were able to divest from South Africa during the time of apartheid. Now some banks in the U.S. want to divest from private prisons. We have been able to get banks to stop transactions in rogue countries. They can certainly end transactions with gun manufacturers, too.” Kamlager-Dove emphasized that “We need to be having a conversation about banks and how they lend. This cannot only be about red flag bills. I am sure that many people killed are also customers and clients of banks. Doesn’t that deserve some consideration?”
Kamlager-Dove’s resolution passed in the assembly “along expected party lines.” Democrats supported the resolution because they want to curtail the supply of guns, whereas the Republicans had 2nd amendment concerns and they feared that the resolution could become a law. Democrats’ and Republicans’ views may be heard in this video. The resolution now moves to the senate. Unfortunately, as a result of the hearing, Kamlager-Dove has been subjected to “an uptick of trolls on social media. It has been horrific.”
In the state of New York, where Democrats won all government branches in 2016, a number of gun control measures have passed recently. This February, Governor Andrew Cuomo signed The Red Flag Bill, also known as the extreme risk protection order bill, in order to prevent individuals who show signs of being a threat to themselves or others from purchasing or possessing any kind of firearm. In July two bills sponsored by Assemblywoman Amy Paulin (D-Scarsdale) were signed into law. Her background check bill will now require a waiting period before a firearm, shotgun or rifle may be delivered to a person. This new legislation will now require that “either the National Instant Criminal Background Check System (NICS) or its successor has issued a “proceed” response to the licensee, or thirty calendar days have elapsed since the date the licensee, seller, transferor or dealer contacted NICS to initiate a national instant criminal background check and NICS has not notified the licensee, seller, transferor or dealer that the transfer of the firearm, rifle or shotgun to such person should be denied.” Paulin’s other bill, requiring safe storage of firearms, was also signed into law. The purpose of A.26868A is to have “safe and secure storage of rifles, shotguns, and handguns to prevent access by children and other prohibited persons has passed the New York State Assembly and the State Senate. The bill is designed to curb accidental injuries and deaths, particularly of children, and will also help prevent incidents of suicide and theft.”
To date, no New York assemblymember or senator has introduced bills to pressure banks to curb transactions with firearm or ammunition manufacturers. Last year, however, Governor Cuomo directed the New York Department of Financial Services (NYDFS) to urge banks and insurance companies to consider reputational risks of having relationships with the National Rifle Association. The NYDFS sent guidance to banks and to insurance companies. Maria T. Vullo who was the Superintendent of Financial Institutions last year wrote banks that “”The Department encourages its chartered and licensed financial institutions to continue evaluating and managing their risks, including reputational risks, that may arise from their dealings with the NRA or similar gun promotion organizations, if any, as well as continued assessment of compliance with their own codes of social responsibility. The Department encourages regulated institutions to review any relationships they have with the NRA or similar gun promotion organizations, and to take prompt actions to managing these risks and promote public health and safety.
In response to Governor Cuomo’s action, the National Rifle Association has brought a law suit against the state of New York. Any gun control organization or state legislature focusing on banks or other financial institutions will be challenged significantly by the staggering amount gun rights’ advocates spend. In the last 18 years gun rights advocates spent between 7 and 10 times more than did gun control advocates in campaign contributions, outside spending (which includes advertising against gun rights organizations and political candidates), and lobbying.
It is important to remember that during the 2008 financial crisis, Americans bailed out or supported AIG, U.S. headquartered banks, Foreign Bank Organizations (FBO), pension funds, hedge funds, and auto companies. According to think thank Better Markets analysis “At least $29 trillion was lent, spent, pledged, committed, loaned, guaranteed, and otherwise used or made available to bailout the financial system during the 2008 financial crash.” Since American taxpayers bailed out banks, surely it is Americans’ right to ask banks to whom they lend money and to disclose their investments. Americans can certainly change banks if they do not like that their banks are financing the firearm industry. Moreover, Americans also have the choice to use credit unions and non-bank lenders.