Major banks are cutting off business with the gun industry, roiling Republicans who want to respect the financial decisions of private institutions while still showing their unyielding support of the Second Amendment.

Some Republicans, enraged at moves by Citigroup and Bank of America to distance themselves from some retailers and gun manufacturers, have called on government agencies to cancel contracts with the banks and defer deregulation proposals that would benefit them. But other Republicans want to keep their hands off, saying lenders are free to decide who they do business with.


It's a conundrum that puts the free-market principles at odds with gun rights, and Republicans across the board are genuinely split over how to react to moves by some of the biggest financial institutions in the country.

"I'm not writing a law that says you can't do it — I just think it's dumb and it's dangerous waters," Rep. Bill Huizenga (R-Mich.) said. "I have a pretty high bar before I'm going to go in and tell the private sector what they should and shouldn't be doing."

Conservatives who have begun to speak out say it's justified given the fundamental role the government plays in allowing the giant banks to operate, including the massive bailouts that shored up their operations during the Wall Street meltdown a decade ago.

"It is a blurrier area," said Senate Banking Chairman Mike Crapo (R-Idaho), the most senior lawmaker to have started to push back against the banks, which his powerful panel oversees.

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Citigroup was the first to provoke the backlash. In March, the bank — the nation's fourth-largest by assets — announced new limits on its retail clients' firearms sales. The bank argued that after cycles of "tragedy and inaction," it was taking steps to prevent guns from getting into the wrong hands.

As Citigroup began to grapple with the controversy, a top official at Bank of America made a surprise announcement that her bank would also respond to the epidemic of gun violence. In an April 10 television interview, BofA Vice Chairman Anne Finucane said the bank will stop lending to the manufacturers of military-style firearms for civilian use. The bank has said next to nothing about the policy since.

The announcements set off one of the GOP's most outspoken populists, Sen. John Kennedy of Louisiana, who has asked an expanding list of federal and state officials to cut off the banks from government contracts. He has also discouraged Republican leadership from taking up regulatory rollbacks that would benefit banks’ trading operations.

Kennedy is a member of the Banking Committee, where in the past two weeks he has forced some of President Donald Trump's appointees to weigh in on the issue in hearings. He has framed Citi and Bank of America's decision as putting America on a path to "red banks and blue banks." He has also suggested that Citi might be running afoul of federal, state and local laws.

One of the regulators responding to Kennedy, acting Consumer Financial Protection Bureau Director Mick Mulvaney, said the banks' actions were "troubling" and noted that he didn't do business with either one. But — underscoring the GOP's internal tension on the issue — Mulvaney said he was hesitant to have his bureau intervene.

For Kennedy, the banks' heavy reliance on the government — in particular their bailouts — supersedes considerations of their rights as private entities.

"If they're going to come crying to the American taxpayer and say, 'We goofed up and you've got to bail us out, it's good for America,' then they ought to stay out of people's politics," he said in an interview.

"Frankly, they ought to stay out of Congress' politics. That's our job to legislate with respect to the Second Amendment, and the United States Supreme Court's job to interpret the Constitution. I would be offended by it if they came out in support of the Second Amendment. If they want to be involved in politics, the CEO ought to quit and run for Congress."

Kennedy has found a powerful ally in Crapo.

Crapo's legacy atop the committee will likely be a sweeping bank deregulation bill that would disentangle both large and small lenders from government oversight. But he is also a staunch Second Amendment advocate who opposes gun control.

A case in point was an Obama-era Justice Department program known as "Operation Choke Point," framed as an initiative to root out fraud by banks and payment processors. Crapo led the charge against the program because he said it threatened to cut off banking services to guns and ammunition businesses.

"I understand that's the government and these are private-sector companies, but they're federally chartered banks, and there's a lot of federal management that goes into the operation of our banking system,” Crapo said in an interview. “So I'm concerned."

On Thursday, Crapo and Kennedy pressed Federal Reserve Vice Chairman Randal Quarles — a Trump appointee — to weigh in on the issue in a committee hearing. Quarles told Crapo that bank decisions on whether to do business with the the gun industry "are really outside of our remit."

Across the Capitol, Rep. Blaine Luetkemeyer (R-Mo.), a senior member of the House Financial Services Committee who wrote legislation to terminate the “Choke Point” program — which Republicans said threatened the gun industry — said Citigroup and Bank of America were making business decisions.

"While I disagree with their decision, and I think it's an important industry that we need to be funding, it is a business decision that they can make on their own," he said. "They get to decide what industries they finance and which ones they don't. It's up to them."

At least 16 of his House colleagues appear to disagree. The group, including Reps. Todd Rokita (R-Ind.), Louie Gohmert (R-Texas) and Steve King (R-Iowa), sent a letter earlier this month to the General Services Administration asking it to cancel Citigroup's federal contract for charge card and payment services with hundreds of government agencies.

"This flagrant attempt to undermine our fundamental rights by caving to radicals should not be endorsed by our federal government," they said.

Citigroup spokesman Rob Runyan said in a statement: “There are millions of Americans who use firearms for recreational and other legitimate purposes, and we respect their Constitutional right to do so. Our policy is based on sales best practices that are designed to prevent firearms from getting into the wrong hands and are currently followed by many of our clients. We always act in accordance with federal, state and local laws.”

Wells Fargo, the nation's third-largest bank, has faced pressure from the opposite end of the political spectrum. On Thursday, the American Federation of Teachers, a major union, announced it would no longer recommend the bank's mortgage lending program to its 1.7 million members because of its ties to the gun industry.

AFT President Randi Weingarten said Wells Fargo "won’t value children and teachers above guns," but she praised its peers for taking action.

"Bank of America and Citi’s decisions to make safer, more responsible decisions about how they interact with gun companies sets an example for the rest of the financial world, and it’s shameful — though not surprising — that Republicans, who are some of the [National Rifle Association]’s best friends, take issue with it," she said. "The NRA and their bullying shouldn’t stop any company from doing the right thing on gun safety.”

Wells Fargo spokesman Alan Elias said the bank also wants schools to be safe from gun violence but that "changes to laws and regulations should be determined through a legislative process that gives the American public an opportunity to participate and not be arbitrarily set by a bank."

"We do not believe that the American public wants banks to decide which legal products consumers can and cannot buy," he said.

