Why Citi Isn’t like Wal-Mart When in Comes to Gun (Or Any Other) Policy
As I’ve written about previously, Citi and Bank of America announced they would limit access to certain financial services for firms engaged in certain firearms businesses in an effort to drive social change. An editorial last month in the Idaho’s Moscow-Pullman Daily News compared this announcement to decisions from Walmart and other firms imposing restrictions on the products they sell or cutting ties with the National Rifle Association.
However, in important ways banks and the other firms mentioned are very different. Unlike Walmart or Hertz, banks rely on a government charter to do business. That same charter grants them significant advantages over their non-bank competitors. Banks enjoy federally provided deposit insurance, and access to federally maintained payments systems. The largest banks, including Citi and Bank of America, also have benefited from a federal bailout where taxpayers protected the banks from their own mistakes. Further, banks are widely expected to be bailed out again if they were in danger of failing, something that would be unlikely to happen for a retailer or car rental company.
The market power banks are using to try and de facto regulate firearms is largely a product of government-granted privilege, and it is worth questioning whether this is an appropriate use of that power. Regardless of what one thinks of gun policy (or climate, or abortion, or any other controversial topic), the proper vehicle for regulation is through the political process, and not though self-appointed regulators using public power for private ends.