Banking

Bank of America becomes latest bank to cut ties with private-prison firms

Wells Fargo and Bank of America were under fire for supporting private prison industries

Critics in 2018 said the prison industries profit from immigration detention and have been accused of prisoner mistreatment.
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Critics in 2018 said the prison industries profit from immigration detention and have been accused of prisoner mistreatment.

Bank of America will stop financing companies that run private prisons and detention facilities, the Charlotte-based bank said this week.

It becomes the latest large U.S. bank to pull back on doing business with the private-prison industry amid concerns about the treatment of immigrants detained under the administration of President Donald Trump. Such concerns have focused on conditions in facilities that house detained immigrants, as well as the administration’s policy of separating migrant children from family members.

The announcement also came the same week a photo was published reportedly showing a migrant and his one-year-old daughter both dead along the banks of the Rio Grande after drowning while trying to cross the river near Brownsville, Texas.

Bank of America Vice Chair Anne Finucane told Bloomberg on Wednesday that the bank will stop doing business with firms that provide prison and immigration-detention services, the news outlet reported.

“We have decided to exit the relationship” with companies supplying prison and immigration-detention services for federal and state governments, Finucane said.

The decision followed a review by the bank that included site visits as well as discussions with clients, civil rights leaders and the bank’s internal black and Hispanic leaders, among others, Bloomberg reported.

In a statement Thursday, Bank of America said the bank plans to terminate its relationships with the companies as quickly as possible. The bank has been discussing the issue for some time, the bank said.

“The private sector is attempting to respond to public policy and government needs and demands in the absence of long standing and widely recognized reforms needed in criminal justice and immigration policies,” according to the bank.

Bank of America joins other banks that have taken similar steps.

Wells Fargo, in a report in January, said it planned to significantly decrease its credit exposure to private prison companies and expected the exposure to continue to decline. San Francisco-based Wells, which has a large presence in Charlotte, also is not actively marketing to the industry, the bank said in the report.

In March, New York-based JPMorgan Chase said it will no longer fund private-prison companies.

Bank of America’s decision prompted GEO Group, one of the largest private-prison operators in the U.S., to issue a statement Wednesday saying its facilities are safe, humane and provide high-quality services.

“To be clear, The GEO Group has never managed any facilities that house unaccompanied minors, nor have we ever managed border patrol holding facilities,” CEO George Zoley said in a statement.

Millions in loans

An Observer analysis last year of securities filings showed that Bank of America, Wells Fargo and other banks have provided various services in recent years to GEO Group and CoreCivic, another private-prison company.

Those banking services can vary by bank but includes hundreds of millions of dollars in loans, as well as arrangements to sell shares of the prison companies’ stock, the filings showed.

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Héctor Vaca, of Action NC, speaks in front of other protesters outside of Bank of America’s Charlotte headquarters in July. The protesters gathered to criticize Bank of America and Wells Fargo for doing business with two large private prison companies that house illegal immigrants. Photo by Deon Roberts

Scrutiny of banks’ connections to CoreCivic and GEO Group predates the Trump administration. But attacks on the bankshave escalated under Trump, who has stepped-up immigration enforcement.

In a statement Wednesday, CoreCivic said Bank of America made a decision based on politics. It also accused the bank of making public and private comments that misrepresented the company.

“Bank of America knows we care deeply about doing business in an ethical, responsible way, and that we have stepped up as a leader in helping address some of the most serious challenges facing our country,” CoreCivic said.

Bank of America said it had intensive engagement with private-prison companies. The bank declined to mention clients by name, citing bank policy.

“We appreciate steps they have taken to properly execute their contractual and humanitarian responsibilities, including seeking the counsel of civil rights leaders and legal advocates,” the bank said.

Pressured to change

The split by large banks from the private-prison industry follows pressure from activists. Some of those activists have demonstrated in cities, including Charlotte, to criticize banks for their ties to the companies.

During one such event in September, demonstrators entered the uptown Wells Fargo branch at Tryon and Third streets to deliver a letter of protest.

Such critics have argued that the banks play a role in separating immigrant families as well as benefiting financially from prison firms whose business model involves detaining immigrants.

Action NC, a nonprofit that organized Charlotte protests over banks’ financing of private-prison companies, praised Bank of America’s move on Wednesday.

“I am glad that Bank of America decided to join other banks in pulling their support from this horrendous industry,” Action NC Board Member Silvia Sanchez said in a statement.

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