YouTube: https://youtu.be/NhtykGApkOc
A new Texas law went into effect last fall prohibiting state agencies from working with, contracting with, or engaging with any business or agency that, in Texas’ eyes, discriminates against the gun industry. This includes firms participating in the profitable Texas bond market. For example, in 2020, Texas issued over $58 billion in bonds and some financial firms earned as much as $80 million in fees helping underwrite the bonds. Texas is second only to California in the size of its bond market.
The new law requires any firm seeking to do business with Texas, including financial firms as above, submit to the Texas attorney general a written affirmation indicating they do not discriminate against the gun industry and equally serve all industries.
Here’s how this affected the behavior of America’s largest bank, JPMorgan Chase.
After a 2018 mass shooting in a Parkland Florida school that killed 17 people, JPMorgan indicated it would remove itself from serving gunmakers. Additionally, the bank’s CEO began extolling the virtues of corporate social responsibility and commitments to the communities they serve. Upon passage of the Texas law, and fearing the loss of $80 million in fees earned by participating in the Texas bond market, JPMorgan affirmed in a letter to the Texas attorney general it finds relations with the firearm industry valuable and does nothing to discriminate against the industry. JPMorgan did this on May 13, one day before a mass shooting in Buffalo and two weeks before a mass shooting in Texas.
While the Texas law is the first passed in the nation, at least 10 state governments contemplate similar laws. In fact, Wyoming recently passed legislation permitting firearms manufacturers to sue anyone who fails to serve them.
Gun control proponents offer a ‘solution.’ They propose legislators in opposing states, such as California with the largest US bond market, pass laws forbidding the state from having any relationship with firms, or financial institutions that support the firearm industry. Then America’s financial giants would face a choice: gain access to the California market by ceasing relationships with the arms industry or lose the California market and participate in the Texas bond market.
