New York state’s pension funds are urging credit-card companies to consider following Citigroup Inc.’s lead in cracking down on gun-sellers.
Comptroller Thomas DiNapoli, the financial watchdog who also oversees the $209.1 billion retirement system for public employees, sent letters last week to nine companies. He asked them to explore whether gun transactions should be classified with restricted high-risk purchases like porn, illicit drugs and cryptocurrencies, a spokesman said Wednesday.
The pension, third largest in the U.S., contacted the chief executives of nine financial institutions including Mastercard Inc., Visa Inc., American Express Co., Discover Financial Services, JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co., First Data Corp. and Worldpay Inc., asking them to assess risks and explore the cost of implementing systems that could reject purchases of firearms, ammunition or accessories.
“If gun violence continues unabated in society — public outcry and calls for action may grow and create significant financial risk for the company,” DiNapoli said in the letter sent to Mastercard.
(Related: BlackRock Puts Pressure on Gun Industry)
Following the Parkland, Florida high school shooting in February, financial institutions and businesses involved in the gun industry have faced public pressure. The New York pension system joins other long-term investors engaging with companies in their portfolios over firearms policies, such as BlackRock Inc. and State Street Corp. Those firms have focused on gunmakers and retailers, but payment processors are a newer target.
The New York system, which oversees retirement funds for more than a million people, owns millions of shares of the companies. DiNapoli said he’s worried processing gun sales could harm their reputations and thus their value.
Citigroup said last month it plans to prohibit retailers that are customers from offering bump stocks, which can make semi-automatic weapons behave as though they are fully automatic, or selling guns to people who fail background checks or are younger than 21.
The restrictions were imposed on companies that use Citigroup for lending and issue store-branded credit cards. Retail customers weren’t affected. DiNapoli cited policies of Apple Pay, PayPal, Square and Stripe, which have all prohibited firearms and ammunition purchases.
Credit-card companies could make it tougher to buy guns, but critics have said the move could be a slippery slope. The U.S. Department of Justice investigated banks that do business with firearm dealers amid concerns that such transactions could elevate risks for fraud and money laundering, but the program was ended in 2017 amid concerns it hurt legitimate business.
Activists last month targeted Visa and Mastercard in particular, asking that the companies cease conducting business with retailers who sell assault rifles.