Bill to penalize banks over gun policies fails in SD Senate committee

The measure, supported by the gun industry, faced opposition from bankers. Some lawmakers, many ardent Second Amendment supporters, said they felt torn by competing interest of free markets.

FSA South Dakota capitol
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PIERRE, S.D. — A gun rights bill that drew ideological friction for conservatives in the South Dakota Senate died on Tuesday, Feb. 15, after the Commerce and Energy Committee voted 8-2 to send the measure to the 41st day.

Senate Bill 182, stylized after a Texas measure, sought to require state officials bank only with financial institutions that left unfettered the firearms industry to do business.

Prime sponsor Sen. David Johnson, R-Rapid City, said many large banks have been — in his words — practicing "discrimination" against shooting ranges, gun manufacturers, and retailers because of perceived ties between the industry and gun violence in America.

"We're here today because of choices that are made in corporate boardrooms that are hundreds and hundreds of miles away," said Johnson.

Under the bill, no state agency, appointee, or state employee could — while doing state business — transmit money with a bank unless that bank specifies it lacks a "policy, rule, or guidance" to shy away from or outright deny business with a person legally engaged in the firearms industry.


A number of gun rights supporters testified that such a bill was necessary after experiencing difficulty in using banks such as Wells Fargo, Citi, and Capitol One for their gun-related businesses.

Brandon Maddox, owner of Sioux Falls-based Silencer Central, told a story about a Capitol One employee in Omaha, Nebraska, who offered to "lie" on a form required to shift his personal credit cards to business cards in order to get around a company-wide stricture.

"Unfortunately, we cannot do business with a firearms' business," Maddox said the employee told him. Fortunately, Maddox said, the employee put down Silencer Central as a "sporting goods business."

During opponent testimony, however, Mike Klumpp of Citibank told the committee no blanket restrictions on gun-related businesses exist.

"To be clear, Citi-issued credit cards can and are used everyday to purchase firearms," said Klumpp.

Rather, he added, the company requires that any retailer they work with impose basic safety requirements, such as requiring background checks on customers and refraining from selling "high-capacity magazines."

"Banks should be able to choose not to do business," said Klumpp.

"This is not an easy bill," said Sen. David Wheeler, R-Huron. "We have two values that many of us hold dear: Second Amendment rights and limited government principles."


Senate Pro Tempore Lee Schoenbeck, R-Watertown, similarly lambasted big banks for "snowflake stuff," but said he trusted local banks to finance gun companies without hesitation.

While the measure was defeated, a second bill is expected to emerge in hoghouse form with nearly identical language in the House of Representatives.

Christopher Vondracek is the South Dakota correspondent for Forum News Service. Contact Vondracek at , or follow him on Twitter: @ChrisVondracek .

The state's biggest political leaders have touted inbound migration, so-called "blue state refugees" who flooded South Dakota. But the biggest driver of partisan races this coming summer and fall appears to be a redistricting process, log-jamming Republicans in primaries and opening up new turf for Democrats.

Christopher Vondracek covers South Dakota news for Forum News Service. Email him at or follow him on Twitter at @ChrisVondracek.
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