Citigroup's status as a municipal bond underwriter in Texas under a state law prohibiting contracts with entities that "discriminate" against the firearm industry will be determined by Jan. 13, according to an advisory from the state attorney general's office.
Tuesday's notice to bond counsel from Leslie Brock, assistant attorney general in the public finance division, said Citigroup's standing letter that it's in compliance with the law has been under review to decide whether the company "has a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association or that otherwise discriminates against a firearm entity or firearm trade association."
"To minimize disruption to the municipal public securities market, we are informing you that we will determine whether or not Citigroup is a discriminating company under Senate Bill 19 by January 13, 2023, and promptly announce such determination," the advisory stated.
It added if Citigroup is found to be discriminating, the attorney general's office will not approve debt issues purchased or underwritten by the investment bank on or after Jan. 13. For bond deals closing prior to Jan. 13, issuers are still required to obtain confirmation from Citigroup before closing that its standing letter can be relied upon.
A Citigroup spokesman declined to comment.
The law, which took effect in September 2021, prohibits state and local government contracts valued at $100,000 or more with so-called "discriminating" companies, including investment banks.
The National Shooting Sports Foundation has been targeting Citigroup for its policies and sent an objection over the bank's participation in a November 2021
Mark Oliva, a spokesman for the firearm industry group, said the answer as to whether Citigroup is discriminating is "straight forward."
"Citigroup continues to maintain their policy of refusing to do business with any entity that sells firearms to adults under the age of 21 or any business that sells standard-capacity magazines," he said in an email. "That policy is outright discrimination against a lawful business that provides the means for adults over the age of 18 who are fully-vested in the entire spectrum of their civil liberties."
The bank announced a
Citigroup has participated in 28 deals in Texas, including conduit issues for nonprofit hospitals, totaling $4.323 billion since November 2021, according to Refinitiv data. The bank is one of 47 underwriters that have updated standing letters on file with the Municipal Advisory Council of Texas.
A study released earlier this year said SB 19 and another Texas law barring contracts with companies that "boycott" the fossil fuel industry
