Amalgamated Bank pressures Sturm, Ruger to take steps to reduce gun violence

Adam Shell | USA TODAY

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Another U.S. bank is using its financial clout to pressure one of the nation’s firearms makers to take steps to reduce gun violence, be more socially responsible and distance itself from the National Rifle Association.

Amalgamated Bank, a New York-bank with $48 billion in institutional investment assets that emphasizes socially responsible practices, sent a letter Thursday to Sturm, Ruger & Company’s board, demanding that it adopt six reforms or it would not support the re-election of one of the gun maker’s board members, Sandra Froman, who is also an NRA board member.

The bank claims that Froman’s and the company’s "close relationship" to the NRA pose a conflict of interest that “may inhibit objective assessment and management risks Sturm, Ruger faces.”

The demands came on the same day that The American Federation of Teachers informed Wells Fargo that it is dropping the bank as a recommended mortgage lender for the union’s 1.7 million members.

The move came after Wells Fargo spurned the union's call to cut lending ties or impose new restrictions on firearms business partners following the Feb. 14 mass shooting at a high school in Parkland, Florida.

In a letter to Sturm, Ruger’s board, Amalgamated’s CEO Keith Mestrich pressed the gun maker to commit to steps that address risks to its business and stock performance, which Mestrich claims has posted returns trailing the broad S&P 500 stock index over the past five years.

On the policy front, for example, the bank called on the gun manufacturer to publicly endorse mandatory background checks for all gun purchases and support the full funding of the federal agency that enforces gun laws.

Amalgamated’s top executive also wants Sturm, Ruger to take steps to monitor gun sellers to make sure guns don’t fall into the wrong hands and to emphasize “product safety innovation.”

All six reforms are recommended by Everytown for Gun Safety, a non-profit group focused on curbing gun violence.

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“All are consistent with the goals (Sturm, Ruger & Company) has articulated of ‘promoting the safe and responsible use of firearms’” Mestrich wrote in the letter.

If the demands are not enacted by May 4, Amalgamated Bank, which owns an estimated 7,500 shares in Sturm, Ruger, said it will “withhold support from Froman’s re-election as director” at the gun maker’s May 9 board meeting.

“We are concerned that (Sturm, Ruger) is unwilling or unable to manage the risks related to calls for reform,” Mestrich wrote.

Amalgamated Bank isn’t the only financial institution to take a stand recently against gun violence and break ties with gun makers.

JPMorgan Chase has said that its business relations with gun makers “have come down significantly and are pretty limited.”

Bank of America said it will stop lending to clients that make military-style weapons for civilian use. Citigroup now requires its business partners to bar firearm sales to customers under 21, as well as those that have not had background checks.

Contributing: Kevin McCoy