Texas AG halts most Citigroup municipal bids over gun law row

Jan 18 (Reuters) – Citigroup Inc (CN) has discriminated against the firearms industry, Texas Attorney General Ken Paxton’s office said, in making a decision that “effectively” to prevent Texas from underwriting most municipal bond offerings in the state.

Republicans have stepped up pressure on the financial industry over environmental, social and governance (ESG) investing practices. Texas enacted a law in 2021 prohibiting government contracts with entities that discriminate against the gun industry.

“It has been determined that Citigroup has a policy that discriminates against a firearms entity or firearms trade association,” the assistant attorney general in the public finance division wrote Wednesday. of Texas AG in the letter seen by Reuters.

“Citi’s designation as an SB-19 discriminator has the effect of stopping 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 any public safety issued on or after Wednesday in which Citigroup buys or guarantees public safety, it added in the letter.

“Citi does not discriminate against the firearms industry and believes we are in compliance with Texas law,” a Citigroup spokesperson said in a statement emailed to Reuters. adding that the company would remain engaged with the Texas AG office to review options.

In 2018, Citigroup placed restrictions on new business customers who sell firearms, requiring them to pass background checks. This followed a high school shooting in Florida in February of that year in which 17 people died.

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: The Thomson Reuters Trust Principles.

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