Bank of America has been accused of breaking a promise to stop lending money to companies that sell military-style firearms to civilians after news that the bank agreed to provide critical financing to bankrupt gunmaker Remington.
The North Carolina-based bank is among seven financial institutions that have committed to provide Remington, which filed for bankruptcy in March, with an almost $200 million lending package, reported Reuters on Sunday. Bank of America, Wells Fargo and Regions Bank each are forking out $43.2 million in loans to help put debt-plagued Remington on “stable footing,” Reuters said. The gunmaker’s bankruptcy exit plan was recently approved by a Delaware judge.
Terms of the loan agreement were drawn up in late March — a few weeks before Bank of America pledged to stop underwriting or financing businesses that manufacture military-style weapons for civilian use. The bank said it made the promise after “intense conversations” with its gun-manufacturer clients ― a dialogue prompted by the February massacre at Marjory Stoneman Douglas High School in Parkland, Florida.
“We want to contribute in any way we can to reduce these mass shootings,” Anne Finucane, the bank’s vice chairman, told Bloomberg TV on April 11.
Remington makes Bushmaster assault-style rifles. In 2012, one of them was used by a gunman to kill 20 children and six teachers at Sandy Hook Elementary School in Connecticut. Families of the victims sued Remington to hold the gunmaker accountable for the damage caused by the weapon.
The bank chose to abide by its loan commitment to Remington because it predated the April pledge, which was meant to kick in on a “go forward” basis, a person familiar with Bank of America’s thinking told HuffPost on Tuesday.
Remington’s financing plan was submitted to the bankruptcy court in March, said the person, who requested anonymity because of the bank’s policy of not discussing client details. “But it had been in the works for weeks, if not months.”
Bank of America could legally back out of its agreement to Remington if it wanted to, according to New York Business Journal; it would just have to find other lenders to cover its commitment.
The person familiar with Bank of America’s decision pointed out that other financial institutions were reluctant to provide loans to the struggling gunmaker. Reuters reported that 30 potential lenders had refused requests to help Remington in the weeks leading up to the company’s bankruptcy.
Finance experts also questioned why Bank of America did not use the loan package as leverage to push Remington to stop manufacturing military-style guns.
Fred Guttenberg, the father of a 14-year-old girl who died in the Parkland, Florida, school shooting, skewered the bank on Twitter Monday for lying to the public, and encouraged people to “stop doing business with them.”
Bank Of America lied. They were supposed to stop doing business with the gun industry. They got the good press for it. Looks like I will stop doing business with them. I suggest you do the same.https://t.co/YgT7L2EZuM
— Fred Guttenberg (@fred_guttenberg) May 8, 2018
Since the Parkland shooting, several financial institutions have moved to distance themselves from the gun industry.
Citigroup, for instance, said in March it would prohibit new retail clients from selling guns to customers who are under 21, and would prevent them from selling so-called bump stocks and high-capacity magazines.
BlackRock, the world’s largest asset manager, recently announced that it had created new investment products for clients who are keen to specifically avoid investing in companies that make or sell firearms.
This story has been updated to include comments from a person familiar with Bank of America’s thinking.