Banks thought they had a win with guns. Now they've got a big GOP headache
Good.How Citigroup and Bank of America shot themselves in the foot with D.C. Republicans.
On April 24 a handful of Citigroup Inc. executives went to the Securities and Exchange Commission for what they thought would be a routine meeting about a boring but key part of their business: derivatives regulation. Instead, they got a stern lecture on guns. A month earlier, in the aftermath of the school shooting in Parkland, Fla., Citigroup had announced it would curtail some of the business it does with companies that sell firearms. That didn’t go over well with Michael Piwowar, one of three Republican appointees on the five-member SEC.
Shortly after the Citigroup executives arrived at his office, Piwowar, according to people familiar with the matter, began castigating them for straying into social policy. Glowering and speaking emphatically, he reminded them that Citigroup was given billions in government bailout money after the financial crisis. In what some of the executives took as a thinly veiled threat, Piwowar said he knew Citigroup wanted the SEC to ease regulations on derivatives and proprietary trading, and suggested they might have trouble finding the votes on the Republican-led commission.
The episode illustrates how fraught the gun issue has become for companies in Washington. Bank of America Corp. has faced similar blowback from GOP lawmakers for announcing it would no longer provide financing to companies that manufacture military-style guns for civilians. What started as an attempt by the two banks to respond to recent mass shootings, and maybe earn some goodwill from the public, has instead turned into a political headache.
Senate Banking Committee Chairman Mike Crapo, who worked with Piwowar when the commissioner was a Senate staffer, wrote letters to the chief executive officers of Citi and Bank of America, scolding them for using their “market power to manage social policy.” And a group of House members asked the General Services Administration to cancel a contract with Citi. “This flagrant disregard for American citizens and their God-given Second Amendment rights cannot be tolerated,” Representative Todd Rokita, a Republican from Indiana who helped lead the effort, said in a statement.
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Originally Posted by Gman
