Bank denies targeting gunmakers in Texas dispute

As the Texas' attorney general accuses the City of Austin of illegally working with an anti-gun bank, the bank itself has been caught in the middle — and it denies that it's anti-gun.

WEX Bank, a Portland, Maine-based regional bank with $14 billion of assets, told American Banker it does not discriminate against firearm companies and has been working to comply with the attorney general's demands.

"WEX Bank's business practices are consistent across all industries we serve," a WEX spokesperson said in an email. "We are committed to fair and unbiased interactions with our customers and prospective organizations. We do not discriminate against any lawful industry or business."

Attorney General Ken Paxton accused WEX of "politically motivated debanking" in a June 16 letter to Austin's City Council. In 2021, Paxton said, WEX abruptly ended its business with Defense Solutions Group, a Texas-based military and police supplier, "because of the company's involvement with the firearm industry."

This put Austin on the wrong side of the law, Paxton said, because the city has had an active contract with WEX since 2021. Earlier that year, Texas passed a law that forbids government bodies from contracting with banks that "discriminate against the firearm or ammunition industries."

"In flagrant violation of its legal obligations, the City of Austin is sending millions of taxpayer dollars to companies that openly discriminate against the constitutionally protected firearms industry," Paxton said in a press release. "The City of Austin does not get to pick and choose which laws it will follow, and I will take every measure to enforce Texas law."

But in his letter, Paxton did not tell the city to terminate its contract with WEX. Instead, he demanded that Austin "amend" the contract to include a provision against anti-firearm discrimination — or face legal consequences.

"Failure to do so may result in action from my office to ensure that our state laws are being enforced," Paxton wrote.

According to WEX, no one has refused that demand. On June 20, WEX said, the City of Austin reached out to the bank with a request for the new amendment, and WEX signed it the same day.

"The amendment confirms compliance with applicable Texas law," the WEX spokesperson said.

The office of Austin's mayor, Kirk Watson, did not immediately respond to American Banker's request for comment.

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In recent years, the banking world has had a complicated relationship with the firearms industry. In March 2018, after a deadly school shooting in Florida, Citigroup said it would refuse services to gun sellers if they did not follow certain rules, including a requirement for background checks and a ban on selling bump stocks.

One month later, Bank of America declared that it would stop lending money to manufacturers of military-style guns for civilian use, such as the AR-15 — a weapon often used in mass shootings.

But these banks faced consequences for their policies. After Texas passed its firearm "discrimination" law, Citi's municipal bond issuances in the state began to plummet. Meanwhile, Bank of America was locked out of Texas' muni bond market for two years.

In 2024, Bank of America softened its gun policy, saying it would assess such loans on a case-by-case basis. And earlier this month, Citi officially scrapped its rules for gun sellers, saying it would "no longer have a specific policy as it relates to firearms."

Meanwhile, resistance to "debanking" has become a popular cause for many Republican politicians, who accuse lenders of cutting off services to conservative clients. President Donald Trump publicly accused Bank of America CEO Brian Moynihan of the practice in January.

In Paxton's letter regarding WEX Bank, the attorney general tied his pressure on Austin to that broader crusade.

"The concept of debanking is anti-American and stands in stark opposition to our rights to freedom of speech guaranteed by the Constitution," he wrote. "I stand with businesses that have been discriminated against because of their involvement in the firearms industry."