By Howard Fischer
Capitol Media Services
PHOENIX -- Republican lawmakers are moving to extend laws designed to protect people against racial, sexual and religious discrimination to gun manufacturers and dealers.
On a party-line vote Wednesday, members of the House Judiciary Committee approved legislation that would require banks that want to do business with state and local governments to certify that they don't -- and will not -- discriminate against a "firearm entity.'' Those that refuse would be denied access to any government contract worth $100,000 or more.
That means everything from handling a city's payroll to helping school districts sell bonds. And that, said foes of SCR 1007, could end up hitting Arizonans in the wallet.
The proposal by Sen. Frank Carroll, R-Sun City West, follows decisions by some financial institutions across the nation to refuse to serve some elements of the firearms industry.
Most notable is Citigroup which announced in 2018 it would not do business with retailers who sell firearms to customers who have not passed a background check or who are younger than 21. That covers Citigroup issued credit cards, loans, banking services or raising capital on the borrowing market through the bank.
Those same restrictions apply to firms that sell high-capacity magazines and "bump stocks,'' a mechanical device that effectively turns a semi-automatic rifle into a machine gun. Such a device was used in 2017 to massacre 58 people at an outdoor concert in Las Vegas.
And JP Morgan CEO Jamie Dimon testified at a congressional committee that the investment banker doesn't do business with manufacturers of "military-style weapons for civilian use.'' There was a similar announcement in 2018 by Bank of America.
Carroll told committee members that banks have "gone into the social justice lane to make decisions about whether they like something or not.''
"That infringes on the Second Amendment,'' he said. "So this is an opportunity to put an end to that.''
Carroll actually shepherded an identical provision through the Legislature last year only to have it vetoed by Gov. Katie Hobbs. This time he has crafted it to bypass the governor and put the issue on the November ballot.
SCR1007 already has been approved by the Senate. That means it needs just final House action to go to voters.
Wednesday's vote came over the objections of Wendy Briggs, lobbyist for the Arizona Banking Association.
She noted that state and federal laws prohibit banks from refusing to serve customers based on their race, religion, sex or other factors. Briggs said lawmakers are conflating those constitutional protections against discrimination with purely commercial decisions made by banks.
"They're not a protected class,'' she said of gun manufacturers and dealers.
Strictly speaking, nothing in SCR 1007 actually would force banks to do business with firearms manufacturers and dealers. Instead, it would provide a penalty to those that don't because they would lose government business.
Briggs said she can't say why some banks have made that decision. But she said that similar laws in Texas, Florida and Oklahoma have resulted in some financial institutions simply deciding they'd rather leave the state than comply.
That possibility worried Megan Kintner of the Arizona Association of Counties. She said having fewer banks provides fewer options for county treasurers who contract with banks to take care of certain services.
"We have seen, in Texas for example, a lot of banks withdrawing from the state,'' Kintner said, creating problems for local governments who already have a hard time getting financial services at a reasonable price.
Briggs said fewer banks bidding to lend money or handle bond sales is bound to drive up costs, "which costs the taxpayers.''
There is evidence to back that up.
A 2022 study conducted by a University of Pennsylvania professor and a Federal Reserve economist concluded that local governments and school districts in Texas seeking to finance projects through bonding have paid between $300 million and $500 million in additional interest costs since that state enacted a law in 2021 similar to what Carroll is pushing here.
Carroll's measure drew the support of Michael Infanzon. He lobbies on behalf of the Arizona Citizens Defense League and the Arizona Firearms Industry Trade Association.
"SCR 1007 is not about firearms,'' he told lawmakers. "It's about upholding the principles of nondiscrimination in contracts, a cornerstone of our free market system.''
But Rep. Justin Heap, R-Mesa, said he sees the issue as protecting the constitutional right of gun ownership. Briggs said that misses the point.
"The Second Amendment allows them to own firearms, it allows them to buy firearms,'' she said. "It does not say that those entities that sell those get to bank wherever they want to bank.''
And Briggs pointed out that it's not just banks that have made decisions about firearms.
Dick's Sporting Goods, for example, stopped selling assault-style weapons. It also banned high-capacity magazines and bump stocks.
And Walmart, the nation's largest retailer, has stopped selling handguns and certain rifles, It also has raised the minimum age to purchase weapons and ammunition to 21.
Nothing in Carroll's proposal would affect these retailers.
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