Voters might decide whether banks can ‘discriminate’ against firearms companies

Republicans want Arizona voters to decide if state agencies should be barred from working with any bank that “discriminates” against firearms companies or individuals who work in the firearms industry. 

At issue are business decisions by financial institutions, including JPMorgan Chase and CitiGroup, to stop working with firearms manufacturers in the wake of the mass shooting at a Parkland, Fla., high school in 2018 that left 17 dead. 

Senate Concurrent Resolution 1007 would change state law to prohibit any public entity from entering into a contract with a value of $100,000 or more with a company that does not agree to not “discriminate against a firearm entity or firearm trade association.” Companies would have to submit written affidavits stating they will comply. 

The measure, which would have to be approved by voters in November, also states that discrimination also includes stopping any working relationship an entity may have with a firearm entity or firearm trade association. 

“This is something I’ve been working on for the past 3 years,” Sen. Frank Carroll, R-Sun City West, the measure’s sponsor, told the House Judiciary Committee Wednesday.

Carroll sponsored the same legislation last year as a regular bill. Although it won approval from GOP lawmakers, the bill was vetoed by Gov. Katie Hobbs. By structuring this year’s iteration as a ballot referral, it avoids Hobbs altogether. Instead, if it passes both legislative chambers, it will head directly to voters later this year.

Carroll contended that financial institutions have stepped into the “social justice lane” and are infringing on 2nd Amendment rights. 

Other states have passed similar laws, including Texas, which passed its law in 2022. Other states followed suit, including Florida and Oklahoma. 

But the passage of those laws did not come without consequences. 

Oklahoma, who also blacklists banks they claim are making “woke” investments, has seen issues with its state retirement system, which has approximately 65% of its pension portfolio with groups that have been blacklisted by the state. 

In Texas, JPMorgan underwrote a large number of the state’s bond deals, but the law made it illegal for the state to work with the financial industry titan. Now, billions of dollars in bonds are up in the air, and it is estimated to have cost Texas taxpayers between $300 million and $500 million in interest. 

Those opposed to Carroll’s legislation voiced similar concerns Wednesday that the same problems would face Arizona. 

Wendy Briggs, a lobbyist for the Arizona Bankers Association, said that, in states that have passed similar laws, banks have left, leading to increased bond rates. That was one of Hobbs’ justifications in her veto letter last year. 

Briggs also told the committee that she did not believe the practices by a “handful” of banks fell under the umbrella of discrimination. According to Briggs, the banks that have policies about working with firearm groups revolve around not working with ones that sell to people under the age of 21 or sell items such as bump stocks. 

Briggs said that the policies are similar to ones enacted by Wal-Mart and Dick’s Sporting Goods who, in 2018, began adding restrictions on who they sell guns to and what accessories they sell. 

The Arizona Association of Counties also voiced opposition, and told lawmakers that county treasurers are worried they’ll have a harder time finding banks to work with, as they will likely flee the state if the measure becomes law. 

Republicans on the committee contended that banks were violating the 2nd Amendment by choosing to not work with certain gun manufacturers and entities. The bill passed along party lines and will head to the full House of Representatives for consideration.