Citigroup may permanently lose its ability to underwrite municipal bond offerings in Texas for a policy that “discriminates” against the firearms industry, according to a letter from Texas Attorney General Ken Paxton’s office.
Paxton’s office claims that Citigroup violated SB-19, a law that blocks government contracts with entities that discriminate against the firearms industry, temporarily halting the bank’s ability to raise funds through underwriting new securities sold by the city, according to the letter first reported by Bloomberg. Following the 2018 Parkland High School shooting, Citigroup implemented several policies aimed at restricting clients who sold bump stocks, refused background checks and sold firearms to individuals under 21.
“It has been determined that Citigroup has a policy that discriminates against a firearm entity or firearm trade association,” Leslie Brock, assistant attorney general chief of the public finance division, wrote in the letter obtained by Bloomberg. “Therefore, until further notice, we will not approve any public security issued on or after today’s date in which Citigroup purchases or underwrites the public security, or in which Citigroup is otherwise a party to a covered contract relating to the public security.”
MILL VALLEY, CA – APRIL 13: A sign is posted in front of a Citibank office on April 13, 2018 in Mill Valley, California. (Photo by Justin Sullivan/Getty Images)
The New York-based bank has argued its policies do not conflict with SB-19, but the attorney general’s office, alongside the The National Shooting Sports Foundation (NSSF), has asserted that the bank is a “SB-19 discriminator,” according to Reuters.
“Citi has been financing public works in Texas for more than 150 years and we currently have more than 8,500 employees who call Texas home. As we’ve said previously, Citi does not discriminate against the firearms sector and believe we are in compliance with Texas law,” Citigroup Communications Managing Director Mark Costiglio told the Daily Caller News Foundation.
In 2018, Citigroup implemented new policies that required business clients who sell firearms to undergo background checks, according to Reuters. The decision followed the Parkland High School shooting in Florida where an active shooter killed 17 people. (RELATED: ‘Nonnegotiable’: Florida Officials Unveil Bill That Would Ban Tracking Of Firearm And Ammunition Purchases)
Citigroup further implemented restrictions on firearm related merchandise, releasing policies that prohibited bank clientele from offering bump stocks, selling to customers who have not completed a background check or selling to customers under the age of 21, according to Bloomberg.
“We’re disappointed with the decision and will remain engaged with the Texas AG office to review our options,” Costiglio told Bloomberg.
Paxton’s office did not immediately respond to the DCNF’s request for comment.
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