Why BofA's Hard Line Against Assault Rifles Hasn't Pleased Gun Activists
(Bloomberg) -- Bank of America Corp.'s pledge to stop lending to firearms manufacturers isn't enough for gun-control activists, who have turned on one of the only two U.S. banks to announce gun-related restrictions.
At issue is the $43 million loan Bank of America is providing to help Remington Outdoor Co. exit bankruptcy court. The bank had pledged to stop lending to companies that make assault-style rifles for civilian use—at least in future transactions. But the financial arrangement with Remington predates the February shooting at Marjory Stoneman Douglas High School in Florida that left 17 dead.
That’s where the gun control activists stepped in this week to question why the bank is continuing to do business with Remington, the owner of an assault-style rifle brand. “We are angered to learn that you have flipped on your promise to the American people,'' the No Rifle Association wrote in a letter to Bank of America Chief Executive Officer Brian Moynihan on Wednesday. The liberal group said continuing with the loan just because it predates the shooting is an “excuse.”
Bank of America entered into negotiations with Remington’s former parent company, controlled by Cerberus Capital Management LP, to extend the loan long before the February 14 shooting. The gunmaker announced it would file for bankruptcy two days before the shooting, then filed in late March. The Chapter 11 plan allows Remington to eliminate hundreds of millions in debt, pay most of its creditors, and turn over the company to its lenders.
The revived gun-control movement that emerged in the wake of the Florida shooting put intense pressure on corporate America to cut ties with both the National Rifle Association and the gun industry. Nationwide protests organized by survivors of the attack morphed into threats of boycotts against companies with ties to firearms businesses and spilled over into Wall Street’s annual shareholder meetings. Bank of America and Wells Fargo & Co. each faced demonstrators who criticized funding provided to gunmakers and retailers selling their products.
Bank of America framed its decision to make no new loans to the manufacturers of assault-style rifles in intimate terms. Gun violence, the bank’s CEO said in April, had affected at least 150 of its employees over the years.
“We want to contribute in any way we can to reduce these mass shootings,” Anne Finucane, the vice chairman of Bank of America, said in an interview with Bloomberg Television. “It is not our intent to underwrite or finance military style firearms on a go-forward basis.”
Remington’s financing deal with the nation's second-largest bank had been inked prior to Finucane’s April 10 statement. But that fact hasn’t placated activists.
“We can’t help but wonder why the next life taken by a Remington gun matters less to you than the profit you hope to turn with this financing. Lives are worth more than money,” the No Rifle Association wrote in its the letter, which was backed by a wide range of gun-control groups, as well as Alec Baldwin, Mia Farrow and Democrat Representative Ted Lieu of California. “You have an opportunity to revoke this loan.”
Finucane, who leads communications, public policy and social impact efforts for Bank of America, responded in a letter sent to activists and other groups. “Remington is aware of the policy that we subsequently announced,” she wrote, “and that policy will dictate our future actions after the bankruptcy proceedings conclude.”
Alyssa Milano, a founder of the No Rifle Association, said Bank of America is “saying many of the right things, but we need to see those statements turn into action—starting with Remington.”
There are risks in whatever course Bank of America chooses in the gun debate, with the prospect of alienating customers and policymakers. Ending its ties to Remington might appease gun-control advocates, for instance, but the firm would have to find another lender to take over its part in helping to finance Remington's roughly $300 million of post-bankruptcy borrowings. And Senate Banking Committee Chairman Mike Crapo, Republican of Idaho, has also chastised the bank for even weighing into gun policy at all.
©2018 Bloomberg L.P.