Washington turned its attention to the firearms industry this week, as politicians discuss a ban on bump stocks and a new bill which would regulate the industry’s lenders.
President Donald Trump on Monday said a ban on the specialty gun stocks is imminent. The accessory, which was linked to last year’s mass shooting at a Las Vegas music festival, allows a semi-automatic weapon to fire at the rate of an automatic weapon. “We are knocking out bump stocks,” the president said. A retailer of the devices sent a marketing email following the statements that claimed their inventory was running low. “When they’re gone, they’re gone,” the email warned.
Republican Senator John Kennedy followed on Tuesday, introducing legislation prohibiting the federal government from rewarding contracts to banks that opt out of doing business with law abiding companies because of social concerns.
In a committee hearing, Kennedy specifically called out Citigroup Inc. and Bank of America Corp., for changing their policies on doing business with the firearms industry following the mass shooting in Parkland, Florida earlier this year. Bank of America stopped lending to companies which manufacture military-style firearms for civilian use and Citigroup imposed restrictions on companies that sell firearms that use the bank to issue store credit cards and for lending. Kennedy argued that the banks were “effectively acting as a private regulator” when they changed their policies.
The bond commission in Kennedy’s home state, Louisiana, voted in August to ban Bank of America Corp. and Citigroup Inc. from a bond sale because of the banks' 'restrictive gun policies.'
“Citigroup and Bank of America have decided to make banking a red versus blue issue by trampling on the Second Amendment rights of small business owners,” Kennedy said in a statement. “And if additional big consumer banks come out with similar anti-gun policies, it will get harder and harder for businesses in Louisiana and elsewhere to find banking services.” He previously criticized the two banks during a Consumer Financial Protection Bureau hearing in April.
In some cases, state and local governments have supported such moves by lenders. Earlier this year, Chicago Mayor Rahm Emanuel proposed using the city’s business to push for stricter gun controls by limiting work with Wall Street firms that didn’t cut ties with companies that sold firearms to people under the age of 21 or dealt in high-capacity magazines.
As Kennedy aims to defend the firearms industry from social pressure, gun maker American Outdoor Brands Corp. (formerly known as Smith & Wesson) is facing pressure from its own shareholders. Investors recently voted in favor of a proposal requiring the company to prepare a report on gun safety. Chief Executive Officer P. James Debney called the proposal “politically motivated.” Shareholders of gunmaker Sturm, Ruger & Co voted in favor of a similar report earlier this year.
The gun industry has had its up and downs recently. In late summer, there was stronger than expected retail activity and Smith & Wesson as well as Ruger boasted impressive earnings. But data released this week by the FBI’s National Instant Criminal Background Check System, a barometer for gun sales, showed that September’s sales had slipped over 9 percent compared to this time last year. It was the slowest September since 2011. The data was “slightly below” expectations according to KeyBanc Capital Markets.
Cowen analyst Cai von Rumohr was more blunt: “NICS checks disappoint again,” he wrote.
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