A bill prohibiting state and local government contracts with large banks that “discriminate” against the firearm industry cleared the Republican-controlled Oklahoma House Wednesday as lawmakers try again to enact a ban.
Ahead of the 74-19 vote, House Bill 2218 was amended to apply only to financial institutions with at least $50 billion in assets.
For government contracts worth $100,000 or more, a bank would be required to provide written verification it does not have “a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association.”
Bill sponsor Republican State Rep. Kevin West said only the largest national banks with such policies would be affected.
“We’re not going to use the citizen’s tax dollars to fund a company who is working against their Second Amendment rights,” he said.
In a House floor debate, Democratic lawmakers raised concerns about the impact the bill could have on municipal bond sales.
West said mid-level and local financial firms could step in to replace big banks.
“Most of what I’ve seen, this has not had a negative effect on that front,” West said. “Despite all the hoopla it was going to drive bonding costs through the roof, it just hasn’t happened that way.”
A 2021 Texas firearm industry discrimination law led to Citigroup’s expulsion earlier this year from underwriting government bonds in that state.
A study last year found that law and another Texas law barring contracts with companies that “boycott” fossil fuel businesses may increase borrowing costs for issuers in the state as a result of less competition among underwriters.
A subsequent study by Econsult Solutions Inc. looked at the impact if similar bills were enacted in six other states, including Oklahoma, which would have faced an approximately $49 million increase in interest costs for bonds issued last year.
Legislation aimed at bank firearm policies passed both chambers last year, but failed to make it out of the conference committee process to reconcile differences.
Measures targeting boycotts of certain industries or environmental, social, and governance factor use in investing have popped up in several states this year.
Utah Gov. Spencer Cox signed into law an expanded “economic boycott” bill last week.
SB 97‘s list of “boycotts” includes the fossil fuel, firearm, timber, mining, and agriculture industries, as well as “boycotts” against businesses that do not adhere to environmental emission standards beyond legal requirements or do not facilitate access to abortions or sex characteristic surgical procedures.
The measure prohibits state and local government contracts worth $100,000 or more with corporations, partnerships, majority-owned subsidiaries, and affiliates engaging in these boycotts.