Four Problems with Citi’s U.S. Commercial Firearms Policy

March 23rd, 2018

Yesterday, Citi announced “a new U.S. Commercial Firearms Policy” with four stated elements:

Under this new policy, we will require new retail sector clients or partners to adhere to these best practices: (1) they don’t sell firearms to someone who hasn’t passed a background check, (2) they restrict the sale of firearms for individuals under 21 years of age, and (3) they don’t sell bump stocks or high-capacity magazines. This policy will apply across the firm, including to small business, commercial and institutional clients, as well as credit card partners, whether co-brand or private label. It doesn’t impact the ability of consumers to use their Citi cards at merchants of their choice.

This policy is extremely vague, and in some cases, may conflict with local law.

First, the policy does not specify what kind of “background check” is required. Does this refer to the National Institute Criminal Background Check System (NICS)? Does it refer to a state that imposes heightened background checks on a person applying for a firearm? What about merchants that are otherwise not required to perform background checks? What about merchants with locations in several states? Does it need to comport with the strictest requirement in all stores?

Second, as Eugene Volokh has explained at some length, a number of jurisdictions prohibit age-based discrimination: it is illegal to not sell a firearm to an 18-year old. Citi cannot impose requirements on affiliates that would force them to violate state law.

Third, the policy does not define what a “high-capacity”magazine is. It varies by state. In California, Connecticut, D.C., Hawaii, Maryland, Massachusetts, and New York, any magazine that holds more than ten rounds is considered a “large capacity magazine.” In Colorado and New Jersey it is 15. In all other states, there is no limitation on magazine size. How is a merchant to know what standard applies? What if the merchant transacts business in several states. Does the 10-magazine limit apply?

Fourth, the fact that Citi is singling out firearm dealers for disparate treatment may violate state law. Georgia Code Title 10, Section 10-1-439.2, provides:

Unless otherwise precluded by law, regulation, or membership eligibility, it shall be an unlawful discriminatory practice for any person to refuse to provide financial services of any kind to, to refrain from continuing to provide existing financial services to, to terminate existing financial services with, or to otherwise discriminate in the provision of financial services against a person or trade association solely because such person or trade association is engaged in the lawful commerce of firearms or ammunition products and is licensed pursuant to Chapter 44 of Title 18 of the United States Code or is a trade association.

If Citi actually attempts to enforce this “policy,” it may incur liability under state law. As I understand it, the Attorney General of Georgia enforces this statute. Other states may have similar laws, but I have not yet done a full survey.

At bottom, I doubt Citi actually cares about enforcing this policy. Its poor draftsmanship does little more than virtue signal their woke capitalism.