NC Republicans want to ban banks from shutting out gun makers and owners

A rash of bills in the North Carolina General Assembly seek to give the government more say over how banks do business.

Three bills passed the House Banking Committee at the state legislature Thursday, dictating who banks must do business with and what types of records they can or can’t keep.

House Bill 784 would make it illegal for banks to refuse to do business with a person or business due to concerns over factors such as their history of environmental violations, corruption, worker abuses, human rights violations and other issues.

How well companies are viewed or scored on those types of issues are often lumped together in a phrase called ESG — for environmental, social and governance. Specifically, the bill would ban banks from ending business relationships, or refusing to provide new financial services, due to politics or an ESG score.

The bill passed the banking committee Thursday with no debate from lawmakers or the general public. Democrats on the committee opposed it.

Rep. Destin Hall, a Caldwell County Republican who’s one of the bill’s sponsors, didn’t respond to a request for comment.

Representatives of the North Carolina Chamber of Commerce attended the hearing but didn’t speak on it publicly, and also declined to comment on the details of the bill afterward. They said their pro-business group doesn’t currently oppose it — but also doesn’t support it.

It and one of the other bills up for debate now have to pass just one final committee before getting a vote on the House floor. That sets up a race against time before May 4, the official — yet often ignored — deadline this year for bills to pass at least one chamber to have a chance at becoming law.

Other banking bills focus on guns

A similar bill, House Bill 781, would ban banks from denying products or services “based on a personal, ideological, moral, or political opinion.”

Supporters say it’s necessary because they worry about banks stopping relationships with gun dealers. Democrats were skeptical.

“I say this in all sincerity: Is this a real thing?” asked Rep. Deb Butler, a Wilmington Democrat. “I mean, I want to hear some concrete examples because I just don’t believe it.”

In 2018, Citibank instituted policies that placed restrictions on new retail clients that sell firearms. It also scrutinized relationships with existing corporate customers. That same year, Charlotte-based Bank of America said it would stop financing companies that manufactured certain assault rifles.

Such decisions — often a move by financial institutions to reduce risk — have come under attack by conservatives.

Federal regulators during the Trump administration encouraged banks to conduct risk assessments of individual customers — not make sweeping decisions affecting whole categories of customers — when weighing whether to provide access to services.

Lawmakers didn’t discuss federal banking regulations or guidance, nor did they discuss the Citibank or Bank of America examples. But they did discuss local anecdotes.

Rep. Jennifer Balkcom, a Hendersonville Republican, told Buler she heard about a pawn shop and gun store in her part of the state that had trouble with a bank. Butler responded that rewriting state law because of that was a huge overreaction.

“This is suggesting that there’s discrimination and rampant refusal of service that is pervasive across North Carolina, and I just don’t believe that is true,” Butler said. “We might have had an incident or two, but we shouldn’t knee-jerk react and put forward bills like this.”

Tracking gun buyers

The committee passed another guns-focused banking bill, House Bill 564.

It would ban financial companies from keeping records that show their customers buying firearms.

There’s an international effort to get financial companies to track people who buy large amounts of guns, in regular intervals, due to suspicions they might be selling them on the black market. Republican lawmakers are worried that if people know their credit card company is tracking their gun purchases, it might make them too scared to buy guns, which could violate their Second Amendment rights.

Butler again questioned why the bill was necessary.

“This, to me, just seems like another law enforcement tool to catch bad actors who would be engaged in illegal arms transactions,” she said.

Republican Rep. Reece Pyrtle, the bill’s sponsor, said federally licensed gun dealers are already required to report suspicious sales to the federal government. So having financial companies also looking out for suspicious sales, too, he said, just goes too far.

“We have to be mindful of our Second Amendment constitutional rights,” said Prytle, who was police chief of the Town of Eden before joining the legislature.

Illegal gun sales often happen along what’s called the Iron Pipeline. Dealers buy guns in the South, where they’re cheap and relatively easy to get, and then drive them up Interstate 95 to sell illegally in the northeast, where guns are often more expensive and harder to obtain.

North Carolina is a key part of the Iron Pipeline. In 2013 a multistate investigation took down several Sanford residents for running what then-New York City Mayor Michael Bloomberg called the biggest gun smuggling ring in NYPD history.

It didn’t stop with that bust. WRAL reported last year that the NYPD arrested a 24-year-old from the Rocky Mount area, who was accused of smuggling more than $40,000 worth of guns into New York to sell on the street.