Bank of America Corp. wants to revive its work in the No. 1 market for US municipal-bond sales.
(Bloomberg) — Bank of America Corp. wants to revive its work in the No. 1 market for US municipal-bond sales.
But it doesn’t appear to have gotten a nod yet from the Republican-led Texas Attorney General’s Office, which is grilling the bank on its policies surrounding the firearms industry.
Austin Kinghorn, Texas associate deputy attorney general for legal counsel, sent the bank’s law firm dozens of questions about its gun industry policies in a June 26 letter. The document was obtained through a public records request.
The bank suspended underwriting in Texas in late 2021 after a new GOP law barred governmental entities from working with companies that “discriminate” against firearm entities. Bank of America doesn’t lend to companies that make assault-style guns used for non-military purposes. After suspending work there, the bank sent a letter in May saying it intends to resume work with public clients in Texas.
The Texas Attorney General’s Office asked about that policy, such as a list of specific products that fall under that category and who determines that. “If ‘military-style weapon’ is not a clearly defined term, how does BofA ensure that it does not discriminate against firearm entities?” Kinghorn’s letter said.
Read the Attorney General Letter Here
The office’s detailed response to Bank of America indicates that it may face a long process before it can resume municipal-bond underwriting in Texas. Kinghorn’s letter said the office may have additional questions.
A spokesperson for Bank of America did not have an immediate comment. A spokesperson for the Texas Attorney General’s Office didn’t immediately respond to request for comment.
Bank of America’s law firm previously said in a letter to the attorney general’s office that the bank generally considers the firearms industry as “high-risk, with clients subject to a heightened due diligence requirement.” Because of that, the bank avoids certain business transactions based on “traditional business reasons.”
Kinghorn asked why the bank considers the firearms industry to be high-risk.
“Explain how any risk profile of the firearm industry materially jeopardizes the adequacy of your earnings, liquidity, or capital more than other industries and provide evidence of same,” Kinghorn said in a separate question. He asked for a response in 45 days.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.