Dozens of banks tell Texas attorney general they don’t ‘discriminate’ against gun companies

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Two days after 19 children and two teachers were shot in a texas elementary school on May 24, an investment bank sent a letter to Texas Attorney General Ken Paxton promising not to “discriminate” against the gun industry.

Chicago-based Cabrera Capital Markets, LLC, is the latest of dozens of banking institutions to make the statement over the past year, to comply with legislation barring state and local governments in Texas from to work with companies that prohibit investments in firearms or ammunition manufacturers. The letters, more than 80 of which have been reviewed by CBS News, highlight the difficult political environment businesses face when called upon to respond to mass shootings.

Most institutions – including local businesses like the First State Bank of Uvalde and multinational corporations like Barclays – submitted one of two standardized forms in the letter published by Paxton’s office and the nonprofit City Advisory Council. profit from Texas. In the form letters, the banks certify that they “have no discriminatory practice, policy, guidance or directive against any firearms entity or firearms trade association.” ‘fire arms”.

Cabrera Capital Markets executives did not respond to emails and phone calls from CBS News.

The law reflects the perilous waters navigated by many companies in an era of increasingly divisive politics, according to University of Houston economics professor Steven Craig.

“The fact that they are putting political risk in American business activities is a sign that we are not in good times,” Craig said, adding that the law was a reaction to announcements made in 2018 by JPMorgan Chase and Citigroup that they were limiting investments in firearms.

“Obviously they thought it would be a good commercial idea to tell their customers what they were doing and that they were going to make these political judgments. And, in my opinion, they forgot that governments could react to this that they would do what happened in Texas,” Craig said.

A spokesperson for Citi, which submitted a version of Paxton’s form letter in October, told CBS News of a June 2021 corporate blog post responding to Texas law. In the post, a CIti executive wrote that company policies have not changed since 2018, when Citi said so. would not invest with any business that sells firearms to persons under the age of 21, or sells bump stocks or high capacity magazines.

In JPMorgan’s letter, which was sent May 13, the company said it does not discriminate against the firearms industry, but “will not fund manufacturers of military-grade weapons for civilian” and “generally views the firearms industry as high risk, with customers subject to heightened due diligence requirements.”

Paxton’s office did not respond to emails seeking clarification on whether Citi and JPMorgan’s policies discriminate against the gun industry. JPMorgan’s letter was first reported by The New York Times.

Banks suspected of falsely claiming to comply with Texas law may be subject to criminal prosecution.

Banks may soon have to satisfy regulators in several other states where politicians aim to protect gun makers, according to Columbia University law professor Jeffrey Fagan. He drew a comparison to the spread of so-called “hold your ground” self-defense laws after one in Florida gained notoriety.

“That model was widely distributed in conservative states. And so, in a sense, it became kind of a contagion of thought. The idea and the law,” Fagan said. “And I see no reason why it couldn’t be subject to the same kind of contagion.”

Legislatures in at least eight other states — Arizona, Kansas, Kentucky, Missouri, Ohio, Oklahoma, South Dakota and West Virginia — are considering similar legislation, according to the National Shooting Sports Foundation, a shooting industry trade association. guns that advises lawmakers on the bills.

Fagan wondered if these laws might ultimately run afoul of Supreme Court precedent regarding corporate speech.

“If we think back to Citizens United, corporate investment as political speech was allowed,” Fagan said, referring to the landmark 2009 Supreme Court ruling barring the government from restricting corporate contributions to political campaigns. “Why can’t we draw an analogy that if we prohibit companies from doing this, it undermines their rights to political speech?”

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