February 20, 2023
California Goes Full ‘Woke’ on Banking Discrimination Against Firearm Industry
Never underestimate the ability of California lawmakers to embrace the wildest ideas when it comes to eliminating gun rights. Other states are pushing back on “woke” banking discrimination. Not California. There’s an effort there to require it.
State Sen. Dave Min introduced SB 637, which requires that California’s public finances cease business with any banks or lenders that have business relationships with firearm manufacturers. The bill would affect every aspect of California’s finances, including municipal bonds, capital projects and the state’s debt.
It would be easy to say this is California taking the opposing track to what Texas did with the Firearm Industry Nondiscrimination (FIND) Act. That’s the law that states if corporate banks hold discriminatory policies, they can’t compete for state or municipal contracts. Those corporate banks are free to discriminate if they choose, but forfeit the ability to profit from Texas taxpayer-funded contracts. Similar legislation has been introduced in Congress by U.S. Rep. Jack Bergman (R-Mich.) and U.S. Sen. Steve Daines (R-Mont.). Sen. Kevin Cramer (R-N.D.) introduced the Fair Access to Banking Act, which would require banks to provide access to services, capital, and credit based on the objective risk assessment of individual customers, rather than subjective broad-based decisions affecting whole categories or classes of customers. Several states are considering their own FIND Acts, including Iowa, Montana, Kentucky and West Virginia. Florida Gov. Ron DeSantis recently announced he’s seeking similar legislation for his state.
The difference between these laws and California’s legislation is that California’s proposal requires corporations to discriminate for the sole reason that firearm manufacturers are in the business of making guns.
That’s nothing to sneeze at, given California’s economy is poised to be the world’s 4th largest at $3.4 trillion. According to the World Economic Forum, it is set to surpass Germany’s economy.
According to the OC Breeze, California Treasurer’s Office, the state manages approximately $3.1 trillion in banking transactions within a fiscal year, including selling bonds and overseeing the state’s debt and investment portfolios. California currently reports $63.3 billion in total General Obligation bonds outstanding.
Codifying Operation Choke Point
Sen. Min’s proposed legislation is a state-level Operation Choke Point, the illegal coercion by the Department of Justice (DOJ) and Federal Deposit Insurance Corporation (FDIC) to discriminate against firearm manufacturers and businesses. A U.S. House of Representatives Oversight and Government Reform investigation found that the FDIC included federally licensed firearms retailers and other companies in the firearms and ammunition industry – some of the most heavily regulated businesses in the country – on a list of risky businesses without any evidence or justification.
Sen. Min’s bill would codify that. He’s no stranger to antigun legislation. He authored the law that ended the sale of firearms and ammunition on state property, which ended gun shows on state fairgrounds.
The bill, though, might be facing legal headwinds. Specifically, it could run headlong into the Commerce Clause. That’s the part of the U.S. Constitution that gives Congress the sole power to regulate interstate commerce. Sen. Min’s bill would deny business to any corporate entity unless it adopts California’s mandate that those businesses refuse business to law abiding, credit-worthy firearm manufacturers. Given the size of California’s economy, this is a direct threat to firearm manufacturers, which comprise a Constitutionally-protected industry. If the government forces the industry out of existence by threat of economic might, it is unlawfully limiting the ability of the firearm industry – and the banks that provide financial services – from conducting interstate commerce. That’s the responsibility of Congress to regulate – not California.
This bill would also run afoul of the Second Amendment. The goal of this bill obviously is to drive the firearm industry out of existence, and with it the ability of law-abiding Americans to exercise their right to acquire firearms for lawful purposes including self-protection. It would shutter the industry that provides the tools law enforcement uses to protect America’s communities and the U.S. military to defend the homeland.
This isn’t the first time California has wielded economic might to discriminate against the firearm industry. California Public Employees’ Retirement System, or CalPERS, is one of the largest public employee pension funds in the country. Entire industries have been on the CalPERS blacklist including tobacco and fossil fuels. Of course, gun control activists who have been having little luck in passing irrational legislation, are also targeting pension funds nationwide to urge divestment.
The problem is that fund managers owe a legal, fiduciary obligation to their investors – those people putting money into the public retirement funds. Fund managers aren’t picking the best performing portfolios, rather they are investing other people’s money to buoy special interests – in this case denying investment into firearm-related businesses at the behest of gun control.
Tucker Carlson, of Fox News’ Tucker Carlson Tonight, reported in 2020 that Yu Meng, who was the Chief Investment Officer at CalPERS, and while he was there “long engaged in shareholder activism to advance leftwing causes in this country like gun control and have been very aggressive about it.” At the same time, CalPERS invested Californians’ public employee retirement funds into companies that supply the Chinese military.
Meng resigned from CALPers in 2020, and the public fund was later sued by a former board member for alleging that CalPERS improperly held a closed door meeting about Meng’s exit, and has since refused to release records about it or of the fund’s assets.
None of that seems to concern Sen. Min. In fact, he sees his radical antigun efforts as a springboard to higher office. U.S. Sen. Dianne Feinstein (D-Calif.) announced she would not seek re-election in 2024. The scramble to replace her began before her official announcement, with U.S. Rep. Katie Porter (D-Calif.) throwing her hat into the arena. State Sen. Min sees this as his opportunity to take his antigun agenda from California to Washington, D.C. Rep. Porter endorsed Sen. Kim to replace her at the U.S. House of Representatives.
Sen. Min’s legislation, and his political ambitions, shows the clear threat to American rights when special interests use the levers of government to pick and choose which rights are favored and disfavored.
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