What a difference seven years and a complete change in culture makes.
In 2018, in the wake of a series of spree killings, several majoer credit card companies began trying to "de-bank" gun-related businesses - in effect, making themselves regulatory bodies:
The company said Thursday that it will bar companies that it does business with from selling guns to people under the age of 21 and require customers to undergo background checks for all firearm purchases.
Citigroup (C) also banned its clients from selling high-capacity magazines and bump stocks, a gun accessory that was used by the shooter that murdered more than 50 people in Las Vegas in October.
The attitude at the time? Pretty breezy:
Citigroup also said it's prepared to lose business if its clients don't comply.
"We know our clients also care about these issues and we have begun to engage with them in the hope that they will adopt these best practices over the coming months," the bank said in a blog post. "If they opt not to, we will respect their decision and work with them to transition their business away from Citi."
This past week, Citi changed course, rolling back the policy:
“We also will no longer have a specific policy as it relates to firearms,” the company said in a statement Tuesday. “The policy was intended to promote the adoption of best sales practices as prudent risk management and didn’t address the manufacturing of firearms.” , rol
The decision comes as the Trump administration alleges that Wall Street is biased against conservatives — a right-wing talking point since more than a dozen state auditors accused Bank of America of “politicized de-banking” in an open letter last year (de-banking is when a bank closes an account for a customer it deems high risk). At the time, Bank of America said it has “no political litmus test.”
It may have just been business. Or, maybe, getting taken to the rhetorical woodshed by the President overaccusations of "de-banking" conservative groups and businesses over discrimination against conservatives:
What Trump was referring to is an allegation that major lenders, including Bank of America and JPMorgan Chase (run by Jamie Dimon), have been “debanking” conservative and religious groups over their politics. Both banks have repeatedly denied the claim, which became a right-wing talking point last spring after more than a dozen state auditors and treasurers wrote an open letter to Moynihan, citing a few examples in which right-wing or religious organizations’ accounts were shut down. (BofA previously stated those instances were unrelated to any political or religious leanings.)
Of course, it's not just peer pressure from the President: the change in administration has been accompanied by a change in the banking regulations that made de-banking - a tool used against money-launderers and other financial criminals - so easy to politically abuse:
The OCC [Office of the Comptroller of the Currency] and FDIC will stop considering "reputational risk"—the risk posed by negative public opinion to a bank’s future financial condition—as a distinct risk category during supervisory bank examinations. On March 20, Acting Comptroller of the Currency Rodney Hood announced that the OCC will remove references to reputational risk from its manuals and guidance issuances. On March 24, acting FDIC Chairman Travis Hill followed suit in a letter to Dan Meuser, Chairman of the House Committee on Financial Services Subcommittee on Oversight and Investigations, stating that the FDIC would "eradicate [reputational risk] from our regulatory approach" and adding that reputational risk "has been abused in the past, and adds no value from a safety and soundness perspective as a standalone risk."
Either way, Citi is changing its tune - and its policies:
"We will update our employee Code of Conduct and our customer-facing Global Financial Access Policy to clearly state that we do not discriminate on the basis of political affiliation in the same way we are clear that we do not discriminate on the basis of other traits such as race and religion," Citi said.
"This will codify what we’ve long practiced, and we will continue to conduct trainings to ensure compliance."
Good riddance.
