Citigroup sets restrictions on gun sales by business partners

Customers view semi automatic guns on display at a gun shop in Los Angeles, California.
Citi restricts gun sales by business partners, says New York Times   

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 divisive nationwide gun control debate.

The new 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 "common-sense measures," echo similar restrictions established by some major retailers, like Walmart. But they also represent the boldest such move to emerge from the banking sector.

Since the deadly school shooting in Parkland, Fla., last month, 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.

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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," its chief executive, Michael L. Corbat, told The New York Times Thursday. Mr. 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.

Activists protest in front of Kalashnikov USA, a gun manufacturer that makes an AK-47 rifle, on February 25, 2018 in Pompano Beach, Florida.
Getty Images
Activists protest in front of Kalashnikov USA, a gun manufacturer that makes an AK-47 rifle, on February 25, 2018 in Pompano Beach, Florida.

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."

Following 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 gun business 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 the asset manager BlackRock said they had reached out to firearms manufacturers and distributors to ask about responses to and strategies to stop mass shootings. The First National Bank of Omaha, which said it would not renew a contract with the National Rifle Association to issue an NRA-branded Visa card, led a quick succession of companies to cut ties with the trade group.

YouTube said in a statement this week that it would start removing videos next month that promote the sale or manufacture of firearms and accessories, especially those that allow simulate automatic firing, like bump stocks.