New York Pushes Banks, Insurers to Review NRA Ties

By Evan Weinberger

The New York Department of Financial Services on April 19 told the banks and insurers that it oversees to review their relationships with the National Rifle Association and any similar advocacy groups to make sure they do not pose a significant risk to their reputations.

New York’s banking and insurance regulator sent letters to the more than 1,400 insurance companies and 1,900 banking and other financial institutions it oversees warning them that maintaining ties with the NRA and other gun advocacy groups could pose reputational risks in the wake of the Feb. 14 shooting at Marjory Stoneman Douglas High School in Parkland, Fla. That incident left 17 dead, including 14 students.

Several companies, including MetLife Inc., which is regulated by the DFS, have cut off their relationships with the NRA since the shooting as a push for tougher gun laws gained steam.

Firms that have yet to make changes to their relationships with the NRA should at least review those ties to make sure they do not pose a risk to their operations, the New York regulator said.

“The department encourages regulated institutions to review any relationships they have with the NRA or similar gun promotion organizations, and to take prompt actions to managing these risks and promote public health and safety,” the DFS letter said.

New York already has among the toughest gun laws in the nation. New York Gov. Andrew Cuomo, a Democrat, wants to see businesses play their part in curtailing gun violence, he said in a statement.

“This is not just a matter of reputation, it is a matter of public safety, and working together, we can put an end to gun violence in New York once and for all,” he said.

Along with cutting off relationships with the NRA, several financial institutions have made changes to their business relationships with gun manufacturers. Among banks, Citigroup Inc. and Bank of America Corp. were the largest to do so, with Citigroup putting restrictions on any business customers that sell firearms, and Bank of America cutting ties with gun manufacturers that make military-style weapons.

The NRA could not be reached for comment April 19.

Federal Regulators Pass

Some Republican lawmakers in Washington have questioned banks that have elected to stop doing business with gun manufacturers and other members of that industry.

Senate Banking Committee Chairman Mike Crapo (R-Idaho) and Sen. John Kennedy (R-La.) on April 19 asked Federal Reserve Vice Chair for Supervision Randal Quarles whether it was appropriate for banks to stop doing business with gun manufacturers and others involved in the industry.

Those issues were “really outside of our remit” at the Fed, Quarles said.

Mick Mulvaney, acting director of the Consumer Financial Protection Bureau, faced similar questions when he appeared before the Senate Banking Committee on April 12.

Like Quarles, Mulvaney said it was not regulators’ place to tell banks whether to do business with certain customers, even though he did not approve of banks cutting ties with the gun industry.

To contact the reporter on this story: Evan Weinberger at eweinberger@bloomberglaw.com

To contact the editor responsible for this story: Michael Ferullo at mferullo@bloomberglaw.com

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