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Citigroup announced a new policy to business partners on March 22. This new policy prohibits the sale of firearms to customers who have not passed a background check, or customers who are under the age of 21. The bank is also barring the sale of bump stocks and standard-capacity magazines.
The new policy applies to all Citigroup clients who offer credit cards backed by Citigroup, borrow money, use banking services, or raise capital through the company.
The policy will restrict businesses who use Citigroup from selling items in their store that are otherwise completely legal in most states and at the federal level, just because their bank says they can’t.
By implementing this policy, Citigroup becomes the first major U.S. bank to take a stance, or as the company calls it, “common-sense measures,” in the debate over gun control.
In a letter to company employees, CEO Michael Corbat was not concerned about the potential controversy or loss of business the new policy could have. In his letter, Corbat informed employees the company plans to have due diligence discussions with its business partners involved with gun sales to ensure they comply with the new requirement. Corbat added, “If they opt not to [follow the policy], we will respect their decision and work with them to transition their business away from Citi.”
In his letter, Corbat also left open the possibility more changes could continue. “Best practices are going to continue to change, and we understand the limitations of our efforts. But we shouldn’t let that stops us from doing our part,” he wrote.
What’s Next?
Citigroup’s decision follows a February column in the New York Times, calling for the financial industry to take a stand against the sale of firearms if Washington won’t.
The column’s writer, Andrew Ross Sorkin, calls for the major banks (JPMorgan Chase and Wells Fargo), credit card companies (Visa, MasterCard, and American Express), and credit card processors (First Data) to set new rules for the sales of guns in America.
Sorkin says it will not be hard for these companies to take a stand, using the example of online processors PayPal, Square, Stripe, and Apple Pay announcing their services cannot be used for the purchase of a firearm.
He says it would be easy for a company, for example, Visa, “to easily change its terms of service to say that it won’t do business with retailers that sell assault weapons, standard-capacity magazines and bump stocks, which make semiautomatic rifles fire faster.”
Sorkin adds, “If Mastercard were to do the same, assault weapons would be eliminated from virtually every firearms store in America because otherwise the sellers would be cut off from the credit card system.”
As Sorkin points out, three major banks (JPMorgan Chase, Citigroup, and Bank of America) have already banned the use of their cards with a legal product, BitCoin.
Now, Citigroup is following Sorkin’s advice and is beginning to do the same with firearms.
Has the Slide Down the Slippery Slope Started?
Following the lead of Citigroup, Mayor Rahm Emanuel of Chicago announced on March 29 that he is seeking City Council approval of a measure that would require banks and financial institutions doing business with the Windy City to implement gun-control sales restriction policies of their own.
Mayor Emanuel expects these restrictions to include limiting gun sales to people 21 or older, conducting background checks on all gun sales, and banning the sale of bump stocks and magazines that hold more than ten rounds.
“The private sector has a role to play in supporting public safety,” Emanuel said in a news release. “Chicago should give our business to companies who share our values and want to be part of the solution to gun violence, not profit from it.”
How Will This Affect You?
Will I still be able to buy a rifle or shotgun?
With regards to the policy restricting sales only to those individuals that pass a background check, federal (and state) laws already require licensed dealers to submit purchasers to a background check before completing the transaction, so this will not have any effect on the legal purchase of firearms from dealers.
As for restricting sales to those under 21, the best answer is “it depends.” Several factors come into play, including the state you live in and your age, for example.
The policy may be difficult, if not impossible, to enforce in some states. Several states have laws prohibiting discrimination against certain protected groups in businesses and places that are considered “public accommodations, “ (places offering goods and services to the public).
These “public accommodation laws” are in place to protect against discrimination based on age. Therefore, if the language in your state’s public accommodation laws protects discriminating against 18-20-year-olds, the retailer may not be allowed to refuse an otherwise legal sale of a rifle to just such an individual. (Federal law already makes it illegal to sell handguns to those under 21.)
Some states with ‘public accommodation” laws, however, only ban discrimination against those 21 and older. In those states, the answer is still up in the air.
A few retailers have voluntarily restricted the sale of rifles to those under 21, including Walmart and Dick’s Sporting Goods. In Oregon, four lawsuits have been filed against the retail giants asserting the stores violated their civil rights by discriminating against them based on their age. Though Oregon’s public accommodation law does not specifically grant protected status to those between 18 and 21, it does prohibit discrimination against individuals who “are of age.” Oregon Labor Commissioner believes the retailers are likely engaging in discrimination, so he intends to introduce legislation next session to place guns among the products that are listed as exempt from age discrimination laws, like alcohol and tobacco.
But what if Citigroup puts pressure on the retailer to refuse to sell a rifle to an18-year-old person? If a retailer is in a state with age discrimination laws protecting 18-to-20-year-olds, the credit card companies will not be able to pressure the retailer because, in most states, it is a crime to force someone to break the law, which in effect, what Citicorp would be doing.
For example, Michigan’s Civil Rights Act (Mich. Comp. Laws. §§ 37.2301-.2304) bans age discrimination in retail sales, and § 37.2701 likewise provides that no person shall “[a]id, abet, incite, compel, or coerce a person to engage in a violation of this act” or “[w]illfully obstruct or prevent a person from complying with this act” or “interfere with a person in the exercise or enjoyment of … any right granted or protected by this act.”
So if you are between 18 and 21 and live in a state that protects against age discrimination for those between 18 and 21 and there is not a specific state law that bans the sale of rifles to those within that age group, Citicorp’s policy may not affect your ability to legally purchase a rifle. The financial giant cannot insist its business partners violate the law.
But if a state bans rifle and shotgun sales to 18-to-20-year-olds, like Hawaii or Illinois, for example, then of course stores would be required to follow Citicorp’s age restrictions by default.
Can Citicorp legally prohibit my purchasing a bump stock or standard capacity magazine?
With regards to bump stocks and accessories like standard capacity magazines, it is a little more complicated.
The refusal of the retailer to sell a bump stock or standard capacity magazine would not be based upon the age of the consumer but on the item itself. If state law prohibits the sale of such items, there is no issue in the refusal by the retailer to sell you the banned item. In those states, it is not Citicorp prohibiting your purchase, but rather state law.
If, however, there is no state prohibition, a retailer can simply stop carrying bump stocks or standard capacity magazines if it wants to abide by the policy being set forth by Citicorp. It becomes a business decision.
If a Citicorp business partner sells me an item in violation of Citicorp’s policy, can I be held liable, criminally or civilly?
The short answer is “No.”
The credit card issuer has no recourse against you in those situations. Their policy does not create a criminal law, nor does it create a civil liability with a card user. The policy is an agreement between the financial company and the business, not the consumer. Any complaints Citicorp has would be with the retailer, not the consumer.
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