Bank of America defends financing deal with rifle maker Remington as activists plan boycott

Key Points
  • Bank of America said in a letter Thursday that its policy, first stated in April, on refusing to finance manufacturers of military-style weapons for civilians "is unchanged."
  • Gun reform activists criticized the bank for moving forward with a plan to finance rifle maker Remington in a bankruptcy lending package.
  • One activist said that he and others connected to his movement and in Parkland, Florida, are planning to close their Bank of America accounts and set up elsewhere.
Remington rifles are displayed during the NRA Annual Meeting & Exhibits at the Kay Bailey Hutchison Convention Center on May 5, 2018 in Dallas, Texas.
Getty Images

Bank of America is trying to clarify "confusion" about its bankruptcy loan to rifle maker Remington in light of the bank's statement in April that it would no longer finance makers of military-style guns for civilian use.

A letter on Thursday obtained by CNBC may have only strengthened the resolve of gun reform activists, who are now calling on people to boycott the bank based on its involvement in the Remington bankruptcy loan.

"There have been some suggestions recently in the press that Bank of America is not standing by the policy that was announced in April" to no longer finance such manufacturers, the bank's vice chairman, Anne Finucane, said in the letter on Thursday.

"The Remington bankruptcy financing commitment was in the works for some months and occurred before our current policy was in place," she said.

Remington goes bankrupt

In a television interview in April, Finucane said it is no longer Bank of America's "intent to underwrite or finance military-style firearms on a go-forward basis." Finucane's remarks came more than a month after the mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida, that left 17 students and adults dead.

News reports in May said the bank provided funding for Remington as part of a massive lending package, and gun reform activists cried foul.

Fred Guttenberg, the father of Jaime, 14, who was killed in the Florida school shooting, called for a boycott.

Guttenberg tweet

After reading Finucane's letter on Thursday, Guttenberg said his view had not changed at all.

Bank of America was "taking on Remington as a new customer," Guttenberg said, "at the same time they were telling us they were no longer doing anything like that." He had noted in a previous interview with CNBC that "the bankruptcy deal with Remington, it was only a couple weeks before Bank of America made their announcement. None of that happened in a vacuum."

The new letter "does not absolve them," he said. "Actually, it doesn't explain anything."

Guttenberg told CNBC that he and others connected to his movement and in Parkland are planning to close their Bank of America accounts en masse and set up elsewhere.

"Next week, we families here are going to make it very clear how we feel," Guttenberg said.

He added that "a bunch of students will be setting up their first bank accounts and it won't be at Bank of America."

David Hogg, a survivor of the shooting who has become a vocal gun-control activist, told CNBC in a text message Tuesday that he is "actively trying to change my bank account from Bank of America to another bank because of this."

In a second text message, Hogg said: "I am in full support of a boycott of Bank of America."

After reading the bank's Thursday letter, Hogg told CNBC that the bank "should invest in communities that are disproportionately affected by gun violence and intervention programs in those communities, such as Cure Violence or CeaseFire."

Any money the bank makes from the agreement with Remington should be donated to victims' funds for people affected by gun violence, Hogg added.

Cameron Kasky, another survivor of the Parkland massacre, told CNBC on Tuesday that Guttenberg "is a fantastic man who is dedicated to the gun reform movement and we're happy to stand beside him in his valiant efforts."

Kasky did not immediately respond to CNBC's requests for comment on the bank's most recent letter.

America's oldest gun manufacturer files for bankruptcy protection

A person familiar with Bank of America's stance pushed back on the criticisms, noting that Finucane's original statement specified that the bank would no longer finance military-style weapon makers "on a go-forward basis."

The person, who declined to be named, said "people are having difficulty understanding that this Remington thing preceded April."

Bank of America's commitment to lend money to Remington was in the works for months, as bankruptcy financing packages often are. The agreement with the lenders came days before the Parkland shooting. The plan was for Remington to reorganize its debt and then emerge from bankruptcy as an ongoing company.

A May report from Reuters, citing court documents, said the Bank of America contributed $43.2 million to Remington as part of a nearly-$200 million financing package.

In her letter on Thursday, Finucane said Remington was aware of the policy the bank announced in April and that it "will dictate our future actions after the bankruptcy proceedings conclude."

Bank of America's policy, she said, "Is unchanged."

Read the full letter below:

"There have been some suggestions recently in the press that Bank of America is not standing by the policy that was announced in April to stop financing the manufacture of military style firearms for non-law enforcement, non-military use. The confusion centers around the Bank's exit financing for the Remington bankruptcy.

Let me be clear – we are not changing our policy to end the financing of the manufacture of these military style firearms. We believe these firearms have had an outsized role in the mass shootings that have devastated so many of the communities that we serve. When we made this announcement we made it clear that this was on a go-forward basis.

Also, at the time we said that we would be engaging those limited number of current clients that we have that do indeed manufacture these firearms for non-military use. Unless it was their intent to cease such manufacture we would exit our relationship with them in an orderly and legal manner.

The Remington bankruptcy financing commitment was in the works for some months and occurred before our current policy was in place. Remington is aware of the policy that we subsequently announced, and that policy will dictate our future actions after the bankruptcy proceedings conclude.

Our policy is unchanged, going forward we will not finance the manufacture of these firearms. We recognize that our policy is a small and imperfect step toward protecting the communities where we operate and where our employees and clients live. But, we feel that we are taking a balanced and respectful approach to address these challenges.

Anne Finucane
Vice Chairman
Bank of America"