A recent move to restrict gun sales is threatening to weigh on Citigroup’s relationship with lawmakers who are critical to the bank’s policy agenda. | AP Photo Citigroup faces GOP backlash on gun policy

Citigroup's landmark decision to restrict gun sales in the wake of the Parkland, Fla., school massacre is threatening its relationship with GOP lawmakers, who are preparing to retaliate against the nation's fourth-largest bank.

Citigroup rattled Republicans with a March 22 announcement that it would impose new limits on its retail clients’ firearms sales. The New York-based lender said the move was intended to prevent guns from getting into the wrong hands after cycles of "tragedy and inaction.”


Though a growing number of corporate titans are distancing themselves from firearms, Citi’s decision got under the skin of conservatives in Congress who are trying to fend off new gun control measures. It annoyed Republicans who have supported deregulatory measures that will help the bank, even after the government rescued it from near-collapse during the 2008 Wall Street meltdown.

"The very fact that Citi remains operational is due entirely to the generosity of the American taxpayers," Sen. John Kennedy (R-La.) said in a scathing letter to Citigroup CEO Michael Corbat. "Please don’t forget that.”

Republicans are now taking aim at Citigroup’s government contracts and warning that they'll think twice about helping the lender the next time it needs assistance from Congress.

Citi representatives have been on Capitol Hill in recent days to address the brewing controversy.

The bank's new policy would require its retail clients to make sure they don't sell firearms to anyone who hasn't passed a background check, nor to anyone under the age of 21. It would also restrict them from selling bump stocks or high-capacity magazines. Citi head of global public affairs Ed Skyler, previously a top deputy to former New York Mayor Michael Bloomberg, an outspoken gun control advocate, played a lead role in announcing the restrictions.

“As we have with other industries that have reputational implications, we created standards based not on ideology, but on established best sales practices, which most of the businesses we work with currently follow," Citigroup spokesman Rob Runyan said. "This policy does not impact the ability of Citi customers to use their credit and debit cards for the legal purchase of firearms.”

The move is threatening to weigh on Citi’s relationship with a lawmaker who is critical to the bank’s policy agenda — Senate Banking Chairman Mike Crapo. While the Idaho Republican has yet to speak out on the decision — lawmakers have been away from Washington for a two-week recess — his staff is focused on the issue, according to people familiar with the matter.

For years, Crapo led the charge against a Justice Department program known as “Operation Choke Point,” which Obama administration officials argued was intended to root out fraud by banks and payment processors, but which he said threatened to cut off banking services to guns and ammunition businesses.

Separately, Crapo introduced legislation intended to deregulate gun silencers. He has promised to "oppose all efforts to weaken Second Amendment rights,” calling out "creative methods” by gun control advocates trying to advance their agenda.

Though Citi’s policy is an example of a private business taking the initiative rather than the government, it has alarmed other members of the Banking Committee, who argue that it will hurt lawful businesses in an attempt to win positive press.

Louisiana's Kennedy, one of the committee's more outspoken members, demanded answers from Citi CEO Corbat in his letter days after the bank announced the new policy. He asked Citi to tally the number of entities in his state that could lose banking services “as a result of your increased scrutiny on law-abiding businesses.” Kennedy’s 2016 Senate run was backed by the National Rifle Association’s political arm.

“I hope you will focus on properly running your business and addressing apparent shortcomings like overcharging credit card interest rates to account holders and compliance with U.S. anti-money laundering laws,” he said. “Those are real ways to ‘do your part’ that would make a difference.”

But Kennedy also took a step beyond simply scolding Citi. In a move that other Republicans are also weighing, he called on the General Services Administration to cancel the bank's contract for charge card and payment services with hundreds of government agencies.

Rep. Todd Rokita of Indiana, who is campaigning in a Republican Senate primary, is poised to make a similar attack on the bank. According to a draft letter obtained by POLITICO, Rokita will also ask the GSA to cancel Citi’s contract under the “SmartPay 3” program.

“This flagrant attempt to undermine our fundamental rights by caving to radicals should not be endorsed by our federal government,” he said in the letter. “The federal government should instead do business with companies that respect all of our constitutional rights, including the Second Amendment.”

Another potential target for Republicans is Citi’s relationship with the House, where it provides purchase and travel cards.

While the firearms policy is inflaming the bank’s standing with Republicans, it has helped with Democrats who are pushing for gun control, though some are likely to stay mum when it comes to applauding a giant bank.

Sen. Bob Menendez (D-N.J.), a Banking Committee member who is encouraging corporations to take action to curtail gun violence, said on Twitter that the company’s announcement was “good news” and “I salute Citi for its actions."

“As we continue to push for action in Congress, I strongly support private companies — from Citigroup to Dick’s Sporting Goods — taking steps to implement common-sense gun control measures to help save lives,” said Sen. Chris Van Hollen (D-Md.), who also sits on the Banking Committee. "These changes are the result of the tireless efforts of student activists, who have reminded us all that inaction is not an option."