Louisiana State Bond Commission Considers Limiting Business with Banks Over Gun and Energy Policies

The Louisiana State Bond Commission is planning to limit the state’s business with large banks based on their dealings with gun manufacturers and energy issues. However, critics fear that such a restriction could end up costing taxpayers more money by limiting competition for the state’s banking business.

The commission intends to interview representatives from a few banks about their firearms and energy policies. If the banks’ views don’t align with the perspective of the Republican-majority commission, they could be removed from a list of qualified institutions that are invited to bid on state business, including an upcoming $275 million bond sale.

Attorney General Jeff Landry’s office pushed Thursday to disqualify six national banks - JPMorgan Chase & Co., Barclays, Morgan Stanley, Royal Bank of Canada, UBS, and Wells Fargo - from Louisiana’s list of pre-approved financial institutions. Landry’s office believes that these banks should be excluded because they oppose fossil fuel production or limit their business with gun manufacturers that sell military-style weapons to people under 21.

Louisiana has already stopped doing business with two banks, Bank of America and Citigroup, because of their refusal to work with certain firearms manufacturers. However, eliminating more banks could result in Louisiana receiving less favorable options when it comes to borrowing money and other financing deals, critics have warned.

The bond commission's former financial adviser, Bob Lamb, had already warned that Louisiana could lose money if it put more constraints on the number of banks it was willing to hire. According to Lamb, "it does limit us. Eventually it's going to bite us in the butt if we continue."

Commissioner of Administration Jay Dardenne also raised concerns about the commission's policy, stating that "if we eliminate all these firms, the answer is we are not going to get the best possible rate." Senate President Page Cortez expressed similar concerns, stating that "we’re going to be imposing on the taxpayers of Louisiana higher interest rates on their bonds and that’s not the job – the fiduciary responsibility – that I’m taking on as a member of this commission."

The commission already screens banks applying for the state’s business upfront, asking questions about their views of Israel, firearms, and fossil fuels. The treasury department has also reversed its position on at least one bank over the past few years.

While the move by the Louisiana State Bond Commission to limit business with banks over their firearms and energy policies may seem like an effort to support gun rights and the energy industry, critics warn that it could end up costing taxpayers more in the long run by limiting competition for the state’s banking business.