In 2021, Gov. Greg Abbott signed Texas Senate Bill 19 into effect, forbidding Texas from approving any public securities purchased from or issued by any banks that discriminate against the firearm industry. The office of Attorney General Ken Paxton even released a list of financial institutions that it alleges is not in compliance with the law.
Per the AG, Texas municipalities had an obligation to divest from such firms, as it would not approve any public securities purchased from or issued by them. The state’s warning has come to fruition, as it has moved to halt Citigroup, Inc, from underwriting most of its municipal bonds in Texas.
Citigroup feels the consequences of SB-19
A spokesperson for the Office of the Attorney General claims that Citigroup’s policies discriminate against the firearm trade. The policy in question is a 2018 rule that its retail business clients must pass background checks before they sell guns. As of last week, the AG will no longer approve any public securities underwritten by Citigroup. In response, Citigroup denies that its policies violate SB-19. It will allegedly continue working with the AG and various state officials to review available options and reach a potential agreement.
Sending a message to other banks
SB-19 made national headlines as a controversial response to many public and private entities tightening their restrictions on firearms. Attorney General Paxton and his staff worked closely with several major banks to ensure their compliance with the law. His insistence on refusing to approve public securities from Citigroup – a major player in the financial sector – is a sign of the state’s commitment to upholding SB-19 despite the law’s polarizing nature. Other financial institutions will see the action and know for certain that if the AG feels that their policies discriminate against the firearm industry, they stand to lose lucrative public contracts