Texas AG Warns Austin Over Contract With Bank Alleged to Have Anti-Gun Policies

Earlier this month Texas attorney general Ken Paxton sent a letter to the city of Austin cautioning officials about the city’s relationship with a bank that allegedly discriminates against the firearms industry, warning the mayor and city council that, “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 added that “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.” 

Under Texas law, governmental entities are forbidden from contracting with companies that discriminate against the firearm and ammunition industries. However, the City of Austin has, in violation of this law, continued to use WEX Bank for its fleet card management. WEX Bank has a history of openly targeting firearms companies, debanking Defense Solutions Group, a supplier of high-end equipment to military and law enforcement entities, in 2021. Accordingly, the City of Austin’s multi-million dollar contracts with WEX Bank are unlawful and must be brought into compliance immediately or face legal action.

WEX Bank, which is headquartered in Maine, disputes that they discriminate against the firearms industry, though the company hasn’t explained why, exactly, they cut off DSG’s access to the credit card payment processing service in June, 2021. According to Paxton, the head of DSG was informed the business was “being cut off from payment processing services because of the company’s involvement with the firearm industry,” but in a statement to American Banker, WEX Bank said its business practices are “consistent across all industries we serve,” adding the company is “committed to fair and unbiased interactions with our customers and prospective organizations” and “do not discriminate against any lawful industry or business.”

Regardless of WEX Bank’s claims, it looks like Paxton’s letter has had the intended effect. American Banker reports that on June 20, four days after the date on Paxton’s directive to the city, Austin officials requested the bank sign on to the new amendment and WEX put pen to paper the very same day, confirming compliance with the Texas law Paxton referenced. 

As Paxton said in his letter to Austin City Council members, “debanking has become a hotly discussed issue throughout our country.” 

Banks and the regulatory regime took action during the Biden administration to cut off everyday Americans and their businesses from critical financial services because of their views. The concept of debanking is anti-American and stands in stark opposition to our rights to freedom of speech guaranteed by the Constitution.

It’s one thing if a bank decides that a particular business poses a risk because of their financial insecurity or a history of not repaying loans. It’s something else entirely to cut off access to their credit card processing because bank executives get the ick when dealing with a gun company or a business within the firearms industry. 

Either way, it looks like both WEX Bank and the city of Austin have fallen in line and are ready to comply with the Texas law, and that’s a win for fans of all of our constitutional rights, including the First Amendment.