Citigroup will stop doing business with companies that allow certain gun sales -- here's the memo

  • Citigroup announced it would require its clients to adopt stricter standards for firearm sales.
  • The new policy requires companies to restrict sales of guns to people over 21 years old who have passed a background check. It also prohibits selling bump stocks or high-capacity magazines.
  • Citigroup said it would stop doing business with clients – from small companies to institutional giants – that don’t adopt the policy.

The US banking giant Citigroup is requiring its clients to impose stricter standards for gun sales – and says it will stop doing business with those that don’t.

Citigroup CEO Michael Corbat announced in a memo Thursday that the bank was instituting a new commercial firearms policy “designed to respect the rights of responsible gun owners while helping to keep firearms out of the wrong hands.”

“Over the last several weeks, I have had many conversations with clients, colleagues and friends who hold a range of opinions on the regulation of firearms in the US,” Corbat said in the memo. “It is clear to me that most people believe there are areas of agreement and practical changes we can make to find common ground.”

The new policy requires clients to adopt these “best practices,” Corbat said:

  • Not selling firearms to someone who hasn’t passed a background check.
  • Not selling firearms to anyone under 21.
  • Not selling bump stocks or high-capacity magazines.

The policy applies across the firm, Citi said, including “small business, commercial and institutional clients, as well as credit card partners, whether co-brand or private label.”

Citi is just the latest corporation to change its stance on guns or the National Rifle Association since the shooting last month at Marjory Stoneman Douglas High School in Parkland, Florida, that left 17 people dead.

The bank said it would stop doing business with clients that don’t adhere to the new standards.

“We have already begun to engage with them in the hope that they will adopt these best practices over the coming months,” the memo says. “If they opt not to, we will respect their decision and work with them to transition their business away from Citi.”

Here’s the full memo:

Dear Colleagues,

Over the last several weeks, I have had many conversations with clients, colleagues and friends who hold a range of opinions on the regulation of firearms in the US. It is clear to me that most people believe there are areas of agreement and practical changes we can make to find common ground.

Citi is ready to do our part to help our country move in that direction. Today, I am proud to announce a new US Commercial Firearms Policy that promotes the adoption of current best practices regarding the sale of firearms. The policy was designed to respect the rights of responsible gun owners while helping to keep firearms out of the wrong hands.

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. Under the policy, we will require new retail sector clients or partners to adhere to these current 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.

It is clear our current clients care about these issues as well, and we believe we can make meaningful progress together. We have already begun to engage with them in the hope that they will adopt these best practices over the coming months. If they opt not to, we will respect their decision and work with them to transition their business away from Citi.

We have few relationships with companies that manufacture firearms. For those that do, we will be initiating due diligence conversations to better understand the products they make, what markets and retailers they sell to, and the sales practices of those retailers to ensure adherence with the best practices outlined above. We will apply the same due diligence screening to potential clients going forward.

We know that our efforts cannot lead to real change unless we work with others. To that end, we are initiating a dialogue within the financial services industry and with other stakeholders to understand whether there are additional technology solutions or voluntary standards that can be enacted. We know a solution may not come quickly, but we are committed to the conversation.

As an avid outdoorsman and responsible gun owner, I know that some will find our policy too strict while others will find it too lenient. We don’t have the perfect solution to supporting our Constitution while keeping our children and grandchildren safe. Best practices are going to continue to change, and we understand the limitations of our efforts. But we shouldn’t let that stop us from doing our part.

– Mike

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.