Banking, Part Two

Mar 22, 2021

Last Thursday’s feature regarding what appears to be a resurfacing problem of banks and credit card clearing houses refusing service to gun-related businesses has attracted more than a little attention.

Individual readers wrote, wanting to know if “their bank” was on the list of unfriendly banks.

Companies wanted more information on banks to avoid so they didn’t waste their time on “unfriendly” companies or unwittingly giving them business.

Reader response made it apparent no one was taking the incident with Illinois’ Smokin’ Gun Worx lightly.

Several asked variations of the same question: “Is it possible someone could compose a list of banks and credit cards that ARE PRO GUN?”

“I, like many,” one reader wrote, “would be happy to dump relations with Chase but don’t want to end up with another anti gun institution.”

A business owner wrote: “I was surprised (only a little) by the mention of Chase Bank since that’s where I do all my personal and investment banking. As I read on I was hopeful that you would give a list of those banks that are most egregious in dealing with our industry and those, if any, that are supportive. Do you have any information that I can pass along to the many accounts that my agency deals with on a daily basis?”

At the time, the only response I had was “nothing right now” but it motivated me to see what I could uncover.

What I learned was that it’s not nearly so simple as Googling “2A friendly banks” -although that does turn up a list of banks that were -as of 2019 - providing services to gun companies.

Here’s our latest short list of national/regional banks that are/were gun-friendly:

  • BB&T
  • Wells Fargo
  • TD Bank
  • US Bank
  • PNC Bank
  • Cadence Bank
  • Chase Bank

Citigroup, despite being the bank of many readers, isn’t on that “friendly” list.

They were one of the initial “virtue signalers” to cut ties with the firearms industry.

So was Bank of America.

When I made inquires of gun companies- with the stipulation all responses would be kept anonymous- one CEO told me that he had been present for the conversation between his company and their Bank of America representative when they were informed that unless they stopped making “assault weapons” they would need to find a new bank.

Despite their decades-long relationship with Bank of America, they did.

After “lots of work by our finance and accounting teams,” they moved their business to Wells Fargo.

It’s still there today.

And Bank of America continues to stick with their position, repeatedly saying they would not “underwrite or finance military-style firearms”.

Wells Fargo, in contrast, has according to the latest numbers I could access (2019) continued their relationships with the industry.

According to 2019 statistics, Wells Fargo has supplied more than a half-billion dollars in credit facilities to gunmakers since 2012.

That lending practice has earned Wells Fargo, a near-permanent listing on anti-gun groups’ lists as among the “least responsive” banks around.

So, as far as “unfriendly financial types” there are few that actually state their position clearly.

Those include:

  • Citigroup
  • Bank of America
  • Amalgamated Bank
  • Mesirow Financial
  • Thrive Capital
  • Credit Karma

Both of these are far from being comprehensive or cohesive lists, and some explanation is in order.

Finding a position on anything, much less a hot-button issue like gun control, is more complicated than visiting a financial website and looking at their business statement.

Most banks don’t willingly announce they’re anti-anything. They choose to keep positions on specific hot-button issues quiet - if possible. It’s a prudent business practice.

Announcing a position for or against - anything - risks alienating a portion of your customer base. That’s why you find commitments to broad-brush ideas (racial equality, social justice, diversity) rather than particulars.

One fairly accurate “tell” is where they put their own money via the organizations they support with contributions or guidance.

Mesirow Financial and Amalgamated Bank, for instance, are both “Founding Partners” of Giffords the anti-gun group founded by former Congressman Gabriella Giffords to “fight the gun violence epidemic.”

Thrive Capital and Credit Karma were two of the 145 companies whose CEOs signed on to a letter sent to the Senate in 2019 calling for more gun control through federally instituted background checks, and the implementation of increased "Red Flag" laws. Thrive Capital’s Co-Chairman, Joshua Kushner, is the brother of Jared Kushner, son-in-law of former President Donald Trump.

Neither Thrive or Credit Karma push their positions publicly, although Wall Street observers say Mr. Kushner is becoming more public now that his brother (and his father-in-law) are out of the White House.

A growing focus of the banking industry on ESG (Environmental, Social, Governance) issues led JPMorgan Chase to restrict work with coal companies and stop funding oil and gas projects in the arctic.

That action led to the former administration’s issuance of additional guidance from the Office of the Comptroller of the Currency against all discriminatory lending practices, but specifically against the energy and firearms sectors.

That guidance hasn’t been removed under the Biden administration, but we’re told it’s likely to come under “scrutiny” in the future.

Firearms industry leaders I’ve spoken with (again, remember the promise of confidentiality) tell me they’re concerned the ESG issues are being broadened to once-again include “undesirable” businesses lumped together by the Obama Administration under their Operation Chokepoint initiative.

It’s tough to argue that payday loan companies with three hundred percent interest rates are essentially loan-sharking, or that their customers deserve protections.

It is considerably more difficult, however, to make the case that legal manufacturing of firearms causes crime.

But anti-gun politicians and organizations continue to conflate that position.

As that continues, banks and their affiliated credit card processing affiliates or divisions seem to be inching- again- away from gun companies.

We’ll keep you posted.

— Jim Shepherd