WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Banking Committee, sent a letter to Acting Comptroller of the Currency Brian Brooks opposing a proposed rule that would punish specific financial institutions that choose not to lend to the firearm industry. The proposed rule would also prevent banks from adopting similar risk-based policies when assessing other industries. Following the 2018 mass shooting at Marjorie Stoneman Douglas High School, where 34 students and faculty were either killed or injured, a number of large financial institutions and corporations reevaluated their corporate responsibility measures. In April 2018, Bank of America announced it would no longer lend money to gun manufacturers who make military-style guns.

Sen. Menendez wrote: “Under the guise of implementing provisions related to fair credit access under the Dodd Frank Wall Street Reform and Consumer Protection Act...[t]his “midnight rulemaking” effort announced just weeks after an election in which Americans elected a new Administration appears specifically targeted at financial intuitions that have enacted carefully considered policies related to firearms sales in an effort to reduce gun violence.” 

The Trump Administration claims this rule is to ensure “fair access “ to banking and financial services for all sectors; however, this is nothing but a politicized effort to force financial institutions to lend to gun companies. This rule change is not based on data and evidence, but instead appears to be politically motivated in an effort to do the gun lobby’s bidding. 

Sen Menendez added: “Gun violence is a national epidemic that deeply affects many of the communities where our financial institutions have customers, employees, and other stakeholders. Financial institutions that work within the law to prevent gun violence should be applauded rather than targeted by government regulators. I strongly oppose any effort – including the OCC’s proposed regulations – to stop financial institutions from enacting gun safety policies that go beyond federal law, which is well within their legal rights. The OCC should immediately suspend this highly controversial proposed rule and return its focus where it rightfully belongs on ensuring a safe and sound banking system.”

The full text of the letter can be found below.

 

The Honorable Brian Brooks

Acting Comptroller of the Currency

400 7th Street SW

Washington DC 20219

 

Dear Acting Comptroller Brooks:

 

I am writing to express my opposition to regulations proposed by the Office of the Comptroller of the Currency (OCC) that would require large financial institutions to extend loans to certain risky industries. Instead of a policy rooted in data and evidence, this proposed rulemaking appears to be a politically motivated effort to punish specific financial institutions and deter other banks from adopting prudent risk-based policies. This is the wrong approach to regulation and the proposed rule should be immediately suspended.


Under the guise of implementing provisions related to fair credit access under the Dodd Frank Wall Street Reform and Consumer Protection Act, the OCC announced a proposed rule (Federal Register Docket ID OCC-2020-0042a) which would prevent large financial institutions from adopting their own risk-based policies. This “midnight rulemaking” effort announced just weeks after an election in which Americans elected a new Administration appears specifically targeted at financial intuitions that have enacted carefully considered policies related to firearms sales in an effort to reduce gun violence. 


After the tragic school shooting in Parkland, Florida, many large institutions and corporations reevaluated their corporate social responsibility measures – including adopting new policies on firearm purchases. Citibank announced a new US Commercial Firearms Policy that required retail clients to adhere to common best practices for reducing gun violence such as requiring all of their retail lending partners to complete a background check before selling a firearm.[1] Other large retail banks including Bank of America have announced or are considering taking similar steps.[2] These corporate responsibility measures are well in line with mainstream corporate America. Wal-Mart, our nation’s largest retailer, has already refused to sell a gun without the completion of a background check and Dick’s Sporting Goods removed assault weapons from their stores.[3] Many of America’s leading companies have taken a public stand against gun violence because they recognize the risks to their communities and their business reputation. This proposed rule would in effect punish banks for taking responsible and legal steps to prevent gun violence and force them to lend to businesses and industries that may pose substantial compliance, reputational and other risks.   


Gun violence is a national epidemic that deeply affects many of the communities where our financial institutions have customers, employees, and other stakeholders.  Financial institutions that work within the law to prevent gun violence should be applauded rather than targeted by government regulators. I strongly oppose any effort – including the OCC’s proposed regulations – to stop financial institutions from enacting gun safety policies that go beyond federal law, which is well within their legal rights. The OCC should immediately suspend this highly controversial proposed rule and return its focus where it rightfully belongs on ensuring a safe and sound banking system.

 

Sincerely,