Business

Texas AG to halt most of Citigroup’s municipal proposals amid gun law dispute


Jan 18 (Reuters) – Citigroup Inc (CN) discriminated against the firearms industry, Texas Attorney General Ken Paxton’s office said, making a decision that “has the effect” of Texas halting Citi’s ability to underwrite most municipal bond offerings in the state.

Republicans are stepping up pressure on the financial industry over environmental, social and governance (ESG) investment practices. Texas passed a law in 2021 banning state contracts with organizations that discriminate against the firearms industry.

“Citigroup has been found to have a policy that discriminates against legal entities or firearms trade associations,” the Texas AG’s assistant attorney general for public finance wrote on Wednesday in the letter seen by Reuters.

“SB-19’s designation of Citi as a discriminator has the effect of suspending its ability to underwrite most municipal bond offerings in Texas,” Paxton’s office told Reuters, referring to the law.

Until further notice, the Texas AG will not approve public securities issued on or after Wednesday in which Citigroup purchases or underwrites the public securities, she added in the letter.

“Citi does not discriminate against the firearms industry and believes we follow Texas law,” a Citigroup spokesman said in an emailed statement to Reuters, adding that the company would continue to work with the Texas AG’s office to review options.

In 2018, Citigroup imposed restrictions on new retail business customers that sell guns, requiring them to pass background checks. This followed a shooting at a Florida high school in February of that year that left 17 dead.

Bloomberg News first reported the news on Thursday.

Reporting by Lavanya Ahire and Akanksha Khushi in Bengaluru, Additional reporting by Urvi Dugar and Mrinmay Dey; Editing by Bradley Perrett, Bernadette Baum and David Gregorio

Our standards: Thomson Reuters Trust Principles.


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