Gov. Katie Hobbs vetoed legislation Tuesday designed to bribe or blackmail Arizona banks into doing business with gun manufacturers and dealers.
In a brief message to lawmakers, the governor accepted the arguments of the lobbyist for the Arizona Bankers Association that imposing such a requirement would result in some financial institutions choosing not to do business with state and local governments. And that would mean fewer banks bidding on government business.
“This would limit competition and increase costs for local governments, costs which ultimately fall on taxpayers,” Hobbs wrote.
She separately vetoed a measure Thursday which would have stripped cities and towns of their ability to charge their sales taxes on groceries. Capitol Media Services had reported the governor’s decision last week when she cited her concerns on the loss of dollars needed for public safety and the likelihood that eliminating those revenues — $161 million a year on a statewide basis in the 65 communities that impose the levy — would simply result in higher property taxes.
That veto drew the ire of Senate Majority Leader Sonny Borrelli, R-Lake Havasu City. He argued that the cities are getting more money in state-shared revenues and that allowing them to continue the local tax on groceries was “only padding cities’ bloated budgets instead of leaving more money in the wallets of hardworking taxpayers.”
Hobbs’ decision to side with bankers in the fight with gun dealers and manufacturers puts the Democratic governor in the interesting position of defending the free-market ability of the financial institutions to decide with whom they want to do business, unfettered by state regulation.
As crafted by Sen. Frank Carroll, R-Sun City West, SB 1096 would not have mandated that banks provide checking, savings, loans, lines of credit or credit card processing to any firm. But it would have barred any public entity from entering into a contract with any company that, according to its terms, discriminates against a “firearm entity or firearm trade association.”
Carroll said during committee debate on the measure that it is justified.
“We’re standing up for the Second Amendment,” he said.
“Our responsibility as members of this government is to, by our oath, defend and uphold the law,” Carroll said. “And our Second Amendment right is just that.”
There has been a move in recent years by some financial institutions to refuse to do business with certain elements of the firearms community.
Sometimes this is limited to specific issues, like whether the company makes or the retailer sells “bump stocks,” devices that allow someone with a legal semi-automatic weapon to fire off repeated rounds with a single pull on the trigger as if it were a restricted automatic device. The shooter who killed 59 people and injured at least 527 others in Las Vegas in 2018 had several rifles equipped with bump stocks.
Others, like Citibank, refuse to work with retailers who sell to buyers younger than 21. And Bank of America announced in 2018 it would no longer lend money to manufacturers of military-style firearms.
But lobbyist Michael Infanzon, who represents the Arizona Citizens Defense League and the Arizona Firearms Trade Association, told lawmakers the actions of banks are even broader than that. He said Wells Fargo refused to open a business account for him because his client list included the Citizens Defense League, which lobbies to allow people to carry their weapons into more places.
“Discrimination sucks,” Infanzon told lawmakers during a hearing on the bill. “It has become increasingly common due to anti-gun rhetoric continuously employed by the media, some politicians and gun-control groups.”
Wendy Briggs, who lobbies for the Arizona Bankers Association, did not dispute that some financial institutions have adopted policies that can leave manufacturers and dealers without the ability to get the services they desire from certain banks.
“The banks are very interested, that’s not going to surprise you, in making money,” she told lawmakers. “So, if they can bank entities and make money, they’re interested in doing that.”
But Briggs said it’s not that simple.
“There are public perception and pressure issues that are exerted on corporations all the time that make them rethink policies,” she said, including from shareholders. And it’s not just guns, Briggs said, saying that Democratic lawmakers in Washington have been pressuring banks to refuse to do business with the fossil fuel industry.
She said, though, there is no pressing need for lawmakers to intercede in the issue to ensure that manufacturers and dealers get the services they need.
“There is not a dearth of banks right now, not anywhere close, that are unwilling to bank firearms entities,” Briggs said.
Ryan Boyd, lobbyist for the Arizona Association of Counties, said the treasurers in his association fear that if banks are found out of compliance with the measure it would leave them in a financial lurch.
As it is, he told lawmakers, small counties usually get only one or two bids to handle their financial services. Boyd said if some banks were found out of compliance with the law that could leave counties with a single bid, meaning “going with the one company that remains, whatever that one company that is, who can then charge whatever additional rates they want within reason.”
The two vetoes bring Hobbs to 18 since lawmakers convened in early January. The record is held by Democrat Janet Napolitano, who nixed 58 bills in 2005.