Financing gunmakers
How to make big banks like JPMorgan choose whether to be socially responsible
After a mass shooting in Parkland, Florida in February 2018, that left 17 people dead, JPMorgan Chase — America’s largest bank — publicly distanced itself from the firearm industry. Its chief financial officer reassured the media that the bank’s relationships with gunmakers “have come down significantly and are pretty limited.”
That was then. This past September, a new Texas law went into effect that bans state agencies from working with any firm that “discriminates” against companies or individuals in the gun industry. The law requires banks and other professional service firms submit written affirmations to the Texas attorney general that they comply with the law.
What was JPMorgan to do? Sticking with its high-minded policy of “significantly” reducing business with gun manufacturers would result in exclusion from Texas’s lucrative bond market. Texas sold more than $58 billion of bonds in 2020, and is currently the second largest bond market after California. (I’ll come back to California in a moment.)
JPMorgan Chase had been among the top bond underwriters for Texas. Between 2015 and 2020, the bank underwrote 138 Texas bond deals, raising $19 billion for the state, and generating nearly $80 million in fees for JPMorgan, according to Bloomberg. Yet since the new Texas law went into effect in September, the bank has been shut out of working for the state.
JPMorgan’s dilemma since Texas enacted its law has been particularly delicate because its chairman and CEO, Jamie Dimon, has been preaching the doctrine of corporate social responsibility — repeatedly telling the media that big banks like JPMorgan Chase have social duties to the communities they serve.
So what did JPMorgan decide to do about financing gun manufacturers, in light of the new Texas law? It caved to Texas. (Never mind that last year, the bank’s board granted Dimon a special $52.6-million award — which is almost three-quarters of the fees the bank received from underwriting Texas bonds between 2015 and 2020.)
On May 13 — one day before the Buffalo mass shooting and less than two weeks before the Texas shooting — JPMorgan sent a letter to the attorney general of Texas, declaring that the bank’s policy “does not discriminate against or prevent” it from doing business “with any firearm entity or firearm trade association based solely on its status as a firearm entity or firearm trade association,” adding that “these commercial relationships are important and valuable.”
The Texas law barring the state from doing business with any firm that discriminates against the gun industry is the first of its kind in the country. But similar laws — described by gun industry lobbyists as “FIND” laws, or firearm industry nondiscriminatory legislation — are now working their way through at least 10 statehouses, according to the Giffords Law Center to Prevent Gun Violence. This year, Wyoming passed a law that allows gun companies to sue banks and other firms that refuse to do business with them.
The lesson here is twofold.
First, pay no attention to assertions by big banks or any other large corporations about their “social responsibilities” to their communities. When social responsibility requires sacrificing profits, it magically disappears — even when it entails financing gunmakers.
But secondly, no firm should be penalized by pro-gun states like Texas for trying to be socially responsible. How to counter Texas’s law? Lawmakers in progressive states like California (whose bond market is even larger than Texas’s) should immediately enact legislation that bars the state from dealing with any firm that finances the gun industry.
In other words: Big banks like JPMorgan should have to choose: either finance gunmakers and get access to the Texas bond market, or don’t finance them and gain access to the even larger California bond market.
What do you think?
Absolutely agree. I woke up thinking about the right to Life, Liberty and the pursuit of Happiness and read this post: “There are a lot more than 21 victims in Uvalde. The media seems to gloss over the fact that fifteen victims were hospitalized, as if the fact that they survived is some kind of exhale, a happy ending.
My brother survived and has lived with a bullet in his brain since he was shot at seven years old. He can’t hold a job, can’t leave the house, suffers from severe PTSD and traumatic brain injury.
My best friend Dani survived and lives with PTSD and a body full of shrapnel from being shot five times at close range with hollow point bullets.
I have two friends who survived Columbine and now are confined to wheelchairs for the rest of their lives, dealing with the many medical complications that come from living with paralysis. They are also plagued by pyscho Columbine killer fans who stalk them, and gun nuts who accuse them of being crisis actors.
Pat, a boy I dated in high school, was an EMT who airlifted kids out of Columbine. The trauma from that day destroyed him. He suffered terrible PTSD and lost his career. He was in a tailspin for years.
We often hear about the 45,000 Americans killed by guns every year, but rarely do we hear about the more than 100,000 gunshot victims who survive, and the family members whose lives are shattered.
We don’t hear about the grueling trials, medical bills, the lifelong physical and emotional complications, the inability to work.
We don’t hear about those who survive the loss of a loved one; the grieving parents, widows, and children left behind.
The media rarely reports on the trauma experienced by the witnesses, the EMTs, the police, the people who clean up the blood and the mess.
We don’t hear about the marriages that crumble in the aftermath, the parents who die of heart attack or cancer, or suicide, after the loss of a child.
We don’t hear about the mothers who give up their own lives and lose their careers so they can care for an incapacitated child, or the community members whose sense of safety and justice has been forever shattered.
The victims of Uvalde are countless. Think of the children and teachers who witnessed the deaths, the ones who attended the dying, who attempted and failed to save lives. Most, if not all of them, will live with PTSD, nightmares, and depression. Most of them will likely never feel safe in school or at any public event again. It will affect their work lives, their relationships, the way they raise their children.
Gun violence is a monster with vile tentacles that reach far and wide. It is a public health crisis of epic proportion to which our nation’s GOP legislators have turned a blind eye, while offering nothing but hollow “thoughts and prayers.”
So what can you do? I am begging you to VOTE in every election. Every single one.
To SPEAK UP against this sick gun culture, even when it’s uncomfortable.
To hound your Senators to pass sensible gun reform.
Put this number for Congress in your cell phone (202) 224-3121. Use it often. You will be able to reach your two Senators and your member of Congress.
Tell them to pass Universal Background Checks. To ban assault weapons (we did it before, we can do it again). To pass Ethan’s Law (Safe Storage).
And lastly, do not give up hope. We fought the tobacco lobby and eventually overcame. We fought the religious lobby and eventually passed marriage equality. '
We can topple the gun lobby, but it will take all of us. We can’t afford for anyone to sit on the sidelines.
At the scene of every mass shooting, witnesses say, “I never thought it could happen here.”
Sharing this from a post from a friend on Facebook.
Corporate social responsibility is a smokescreen at best. “Responsible” companies are either lying or will be outmaneuvered by companies that couldn’t care less about humans or the planet. Regulation to create a level playing field is the only way.