Citigroup restricts gun sales by business partners
Citigroup is setting restrictions on the sale of firearms by its business customers, making it the first Wall Street bank to take a stance in the nationwide gun control debate.
The policy, announced Thursday, prohibits the sale of firearms to customers who have not passed a background check or who are younger than 21. It also bars the sale of bump stocks and high-capacity magazines. It would apply to clients who offer credit cards backed by Citigroup or borrow money, use banking services or raise capital through the company.
The rules, which the company described as “commonsense measures,” echo similar restrictions established by some major retailers, such as Walmart. But they also represent the boldest such move from the banking sector.
Since last month’s deadly school shooting in Parkland, Fla., renewed calls for remedies to firearms violence have led to sweeping consumer boycotts and unprecedented moves by corporate America to distance itself from the powerful gun lobby.
But federal lawmakers have taken limited action, and President Trump quickly abandoned a promise to pursue gun control measures, instead promoting proposals backed by the National Rifle Association to arm teachers.
The financial services and investment community was even less engaged, staying mostly quiet on suggestions that it wield its considerable influence over gun merchants to encourage firearms-related changes.
Citigroup’s gun policy has “been a while coming,” CEO Michael Corbat said in an interview Thursday. Corbat, who called himself “an avid outdoorsman and responsible gun owner,” acknowledged that “some will find our policy too strict while others will find it too lenient.”
“We don’t pretend that these answers are perfect, but as we looked at the things we thought we could influence, we felt that, working with our clients, we could make a difference,” he said. “Banks serve a societal purpose — we believe our investors want us to do this and be responsible corporate citizens.”
Citigroup said it had begun to inform existing small business and credit card clients and commercial and institutional partners of its plan and would screen future partners using the new requirements.
The bank said it has few gun manufacturing companies as clients, but those it does work with will be asked to provide details about their product and distribution networks.
If business customers decline Citigroup’s restrictions, the bank said it would work with them to “transition their business away.” The company declined to name clients or describe the extent of affected partnerships but said that “real revenue is at risk” if relationships fall through and customers protest. Some of Citigroup’s clients, such as Walmart, already adhere to the new policies.
Edward Skyler, an executive vice president at Citi, wrote in a blog post that the company’s announcement “will invite passion on both sides.” But he stressed that the policies are “not centered on an ideological mission to rid the world of firearms.”
After various mass shootings, “we have waited for our grief to turn into action and see our nation adopt common-sense measures that would help prevent firearms from getting into the wrong hands,” he wrote. “That action has sadly never come and as the weeks pass from the most recent mass shooting, it appears we remain in the same cycle of tragedy and inaction.”
Wall Street is deeply tied to the sprawling, opaque gun industry through pension funds that buy into public gun companies, private equity firms with firearms holdings and financial institutions that back sizable loans to handgun and rifle manufacturers.
In recent weeks, both Bank of America and asset manager BlackRock said they had reached out to firearms manufacturers and distributors to ask about their responses to mass shootings, and strategies to stop them.
American Outdoor Brands, the parent company of the Smith & Wesson gun brand, replied to BlackRock in a public letter this month, saying that it respects the national debate about gun safety and shares “the nation’s grief ” over the Parkland killings and “the desire to make our communities safer.”
But American Outdoor, whose stock price has been more than halved since the 2016 election, stressed that “the solution is not to take a politically motivated action” that “results in no increase in public safety.”
Last month, the First National Bank of Omaha, which said it would not renew a contract with the National Rifle Association to issue an NRAbranded Visa card, led a quick succession of companies to cut ties with the trade group.
YouTube said this week that it would start removing videos next month that promote the sale or manufacture of firearms and accessories, especially those that allow simulated automatic firing, such as bump stocks.
On March 12, gun manufacturer Sturm Ruger addressed shareholder concerns in a letter that promised to continue manufacturing and selling semiautomatic firearms, or what the industry refers to as modern sporting rifles.
In the letter, the company said that “succumbing to political pressure to do what is expedient” would fly “in the face of our fiduciary responsibility as stewards of the company for the benefit of shareholders.”