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Are Banks That Engage in Political Activism Really 'Private'?

Summary:
Private firms are becoming increasingly vocal about public policy issues, and are well within their rights to do it. However problems arise when firms aren’t as “private” as they seem. Take banks—whose business model is uniquely linked to the government — which seek to limit customers’ access to services in the name of corporate social responsibility. Following the horrific school shooting in Parkland, Florida, Citibank and Bank of America stated they would withhold certain financial services from firearms businesses that do not meet their own requirements about which products should be sold. Additionally, banks are talking about tracking credit card purchases used for firearms, possibly as a precursor to banning them.

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Private firms are becoming increasingly vocal about public policy issues, and are well within their rights to do it. However problems arise when firms aren’t as “private” as they seem. Take banks—whose business model is uniquely linked to the government — which seek to limit customers’ access to services in the name of corporate social responsibility.

Following the horrific school shooting in Parkland, Florida, Citibank and Bank of America stated they would withhold certain financial services from firearms businesses that do not meet their own requirements about which products should be sold. Additionally, banks are talking about tracking credit card purchases used for firearms, possibly as a precursor to banning them.

Brian Knight
Brian Knight is a Senior Research Fellow for the Financial Markets Working Group at the Mercatus Center at George Mason University. Brian most recently worked for the Milken Institute, where he headed up the FinTech and Capital Access programs. He has experience working for a broker-dealer with a focus on the emerging online private-placement market and was the co-founder of CrowdCheck, a company providing due-diligence and disclosure services to companies and intermediaries engaged in online private offerings.

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