INDIANAPOLIS, IN — Gov. Kristi Noem signed an executive order to “protect South Dakotan’s 2nd Amendment rights” on April 14, specifically limiting the ability of the state’s executive agencies to contract with financial institutions that “discriminate against firearm-related entities.”
The executive action came during a speech at the National Rifle Association’s Institute for Legislative Action Leadership Forum in Indianapolis.
Other speakers during the annual event included former President Donald Trump, former Vice President Mike Pence and New Hampshire Governor Chris Sununu.
“The Founders understood deeply that, without an armed citizenry, authentic freedom could not and would not survive,” Noem said during her remarks at the leadership conference.
The construction of policy around which types of businesses are eligible for state contracts has become a mainstay in Noem’s administration, most recently prohibiting agencies from entering into contracts with companies connected to “evil foreign governments” like China and Russia.
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Under Noem’s executive order, no state agency controlled by the governor can contract with a financial institution that “refuses to engage in the trade of any goods or services with [an] entity based solely on its status as a firearm-related entity.”
The state currently contracts with several banks and other financial institutions in areas like loan servicing, financial services and insurance benefit plans.
While the enforcement initially relies solely on a certification by the contractor, any evidence of discrimination against a firearm-related entity of the sort is grounds for contract termination.
“South Dakota is setting the standard for the most 2nd Amendment friendly state in the nation,” Noem said. “But it’s not just the media and big government that are attacking our rights. Now, we have seen banking institutions go after law-abiding gun owners. Well, not on my watch. I won’t stand for it, not in South Dakota.”
It’s unclear exactly which financial institutions would currently qualify as having discriminated against firearm-related entities.
The most high-profile example of potential discrimination by financial institutions against individual gun owners came last year, when the Switzerland-based International Standards Organization, which sets commercial standards in around 160 member countries, created a unique merchant category code for gun retailers.
The move followed pressure from gun control activists, who argued categorizing these transactions could “help track suspicious weapons purchases.”
“Financial institutions and payment networks, such as Visa, MasterCard, and American Express can and should do everything they can to help law enforcement prevent some mass shootings by identifying suspicious gun purchases through the implementation of this new code,” Massachusetts Sen. Elizabeth Warren wrote in an open letter on the issue last September.
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While these payment giants initially indicated they would work to implement this change, they began abandoning the idea in March of this year, as bills outlawing the use of the code moving through several states were leading to “significant confusion and legal uncertainty in the payments ecosystem.”
During South Dakota’s 2022 legislative session, Sen. David Johnson, of Rapid City, and Rep. Jon Hansen, of Dell Rapids, carried a bill similar to Noem’s executive order. The proposal failed in a Senate committee.
“I look forward to making this executive order permanent next session,” Hansen wrote in a tweet on April 14.
Jason Harward is a Report for America corps reporter who writes about state politics in South Dakota. Contact him at 605-301-0496 or jharward@forumcomm.com.
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