(Bloomberg) -- Few places know the toll of gun violence as well as Chicago. But even the city that saw more than 2,700 shootings last year is finding out that using economic muscle to push Wall Street into enforcing gun control is easier said than done.
On Monday, the Chicago City Council’s finance committee put on hold an ordinance that would have barred the city from working with banks whose clients failed to adhere to certain policies, such as not selling firearms to anyone under 21 or dealing in high-capacity magazines. Mayor Rahm Emanuel introduced the proposal three weeks ago in the wake of the school shooting in Florida, saying “when it comes to fighting for stronger, smarter gun laws Chicago is putting our money where our mouth is.”
The plan stalled in the face of opposition from the entities it seeks to police. The Illinois Bankers Association called the measure “overly broad.”
If enacted, a financial institution couldn’t win or renew city contracts unless it “adopted a safe gun sales policy applicable to its retailer clients, partners or customers.” The result was a proposal that could have hampered Chicago’s ability to deposit or borrow money -- especially given that the city already has a junk rating from Moody’s Investors Service, making it more difficult to float bonds.
“We were concerned that we wouldn’t be able to identify banks we could do business with,’’ Chief Financial Officer Carole Brown, a part of Emanuel’s administration, told reporters at City Hall, citing the “very broad’’ nature of the ordinance. “In the current form, it definitely impacted our ability to access the capital markets. It also affected our ability to have a relationship with our municipal depositories.’’
Chicago’s plan comes amid rising momentum for gun-control policies after the Feb. 14 shootings at a high school in Parkland, Florida, that left 17 dead. Last month, Citigroup Inc. said it plans to restrict gun sales by business customers, a step that the city cited in its ordinance. Last week, Bank of America Corp. announced plans to stop lending to companies that make assault-style guns for non-military purposes.
On Monday, Ben Jackson, vice president of government relations at the Illinois Bankers Association, said companies would have faced a difficult challenge in verifying whether all of a bank’s clients adhered to the rules.
“It’s a one-size-fits-all solution, levering financial institutions’ business activities,” Jackson said. “The ordinance creates an impossible standard for financial institutions to comply with.”
After Jackson’s testimony, the committee put the ordinance on hold for more discussion.
“We have to craft this in a way that is going to permit the purpose, the intention, of trying to leverage our influence with business entities to create a sound public policy,’’ said Alderman Edward Burke, chair of the committee who had introduced the plan with Emanuel.
©2018 Bloomberg L.P.