John Kennedy: Banks should stay out of political debates
Major banks that took taxpayers’ money in the Wall Street bailout shouldn’t venture into setting social or public policy requirements for customers, notably when it comes to gun rights, says a GOP senator who’s eyeing legislation to bring the banks to heel.
Sen. John Kennedy said he was proud of his home state, Louisiana, which last month blocked Citigroup and Bank of America from taking part in a highway bond issuance in order to punish them for their policies requiring clients to abide by new gun controls.
Now he’s looking for ways to elevate that debate to the national level.
“My goal in this is to just keep these banks from getting involved in politics,” Mr. Kennedy said. “I’m not a pro-regulation guy, but I’m also not much on companies that are too big to fail and that are still in existence because they took taxpayer money trying to become social engineers. I’m not too keen on that either.”
The senator is keeping a close hold on his ideas, saying he doesn’t want lobbyists to start picking apart his plans.
But he hopes other states follow the lead of Louisiana in standing up for constitutionally protected rights, and he urged opponents to think how they would react if rights they wanted to exercise were being targeted.
“I mean, what if Citigroup decided tomorrow that they were going to no longer offer banking services to anyone who knelt for the national anthem? Is that something we really want to invite?” he said. “What if Bank of America tomorrow said we’re no longer going to process payments for any medical office that performs abortions? I would oppose that they need to stay out of politics.”
The banks’ moves were one of the major pieces of fallout from the Valentine’s Day school shooting in Parkland, Florida.
In March, Citibank announced it would only work with retail clients if they required background checks for gun purchases and restricted sales for people under 21. Bank of America also said after the Marjory Stoneman Douglas High School shooting that it was backing away from clients that sell semiautomatic firearms.
Senate Banking Committee Chairman Mike Crapo has also asked the CEOs of the two banks for more information about how they decided to impose the new requirements.
“It is deeply concerning to me when large national banks like Bank of America, which receive significant forms of government support and benefits, use their market power to manage social policy by withholding access to credit to customers and companies they disfavor,” the Idaho Republican wrote in a letter to company CEO Brian Moynihan earlier this year.
For their part representatives for the banks have said they weren’t trying to make new social or public policy and framed the moves as business and “risk-based” decisions.
They say the policies aren’t designed to go as far as banning their customers from using their debit or credit cards to buy guns or make other purchases at companies that might not follow the new restrictions.
“It is disappointing that the taxpayers of Louisiana will be deprived from competitive bidding for necessary public works because the process has been politicized,” a Citigroup spokesperson said.
Mr. Kennedy, a former Louisiana state treasurer, says it’s the banks that began playing politics.
“We’re a bunch of deplorables to them if you believe in the Second Amendment,” he said. “And that’s fine. I concede their CEOs and management they’re smarter than me, and they have the right to look down on me, but I have the right to say I’m not going to do business with you, and that’s what my people did and I’m proud of it.”
He said the banks didn’t hesitate to turn to the government when they “gobbled” up taxpayer money in the throes of the 2008 financial crisis. And he private banks still rely on the federal government to insure their assets and approve national charters.
Ron Davis with Bank of America told Louisiana state bond commission members at a hearing last month that the company was not trying to make public policy.
“We have made a conscious business decision, and we have many policies within our business that guide how we operate our business,” he said.
But Louisiana officials suggested it was a one-sided conversation. They wondered whether the banks would stop doing business with drug manufacturers or automobile companies because thousands of Americans die each year from overdoses and car crashes.
Secretary of State Kyle Ardoin pointedly asked Mr. Davis if the company does business with cities that allow immigrants who crossed the border illegally to vote.
Mr. Davis said he wasn’t prepared to answer the question.