Citigroup Inc has discriminated against the firearms sector, the office of Texas Attorney General Ken Paxton said, making a decision that “has the effect “of Texas halting Citi’s ability to underwrite most municipal bond offerings in the state.
Republicans have been ramping up pressure on the finance industry over what they say are their increasingly aggressive environmental, social and governance (ESG) practices.
“Citi’s designation as an SB-19 discriminator has the effect of halting its ability to underwrite most municipal bond offerings in Texas,” Paxton’s office told Reuters, referring to the law.
Texas enacted a law in 2021 that prohibited government contracts with entities that discriminated against the firearms industry.
“Citi does not discriminate against the firearms sector and believes we are in compliance with Texas law”, a Citigroup spokesperson said in an emailed statement to Reuters, adding that the company would remain engaged with the Texas AG office to review options.
Bloomberg News first reported the news, citing a letter that Leslie Brock, assistant attorney general and chief of the public finance division, distributed to lawyers on Wednesday.
It had been determined that Citigroup had a policy that discriminated against a firearms entity or firearms trade association, Brock wrote in the letter, according to Bloomberg.
“Therefore, until further notice, we will not approve any public security issued on or after today’s date in which Citigroup purchases or underwrites the public security, or in which Citigroup is otherwise a party to a covered contract relating to public security,” according to the letter.
In 2018, Citigroup put restrictions on new retail business clients that sell guns, requiring that they pass background checks. That followed a high school shooting in Florida in February of that year in which 17 people died.
Paxton’s office did not respond to a request for further comment.
