Time for Businesses to Start Shopping for a New Bank?

The McMillan Group International, the parent company of McMillan Firearms Manufacturing was informed by an employee of Bank of America (Mr. Ray Fox, Senior Vice President, Market Manager, Business Banking, Global Commercial Banking for BofA) that after a 12 year relationship with McMillan, Bank of America was no longer interested in maintaining that relationship.

When pointedly asked “…[are you] going to tell me is that because we are in the firearms manufacturing business you no longer want my business.”

Mr. Fox reportedly responded. “That is correct.”

When “Bank of America” and “McMillan” were Googled, there were over 23,000 hits, indicating that this story has rocketed around the internet with remarkable speed, yet none of the articles that I read do much more than repeat the bare bones story that was reported at PJMedia by Bob Owens

Naturally, commenters focused on the fact that Bank of America severed its relationship with McMillan simply because they manufacture guns.  But there is something very suspect in the claim that BofA’s actions were due solely to an antipathy toward guns.  McMillan had been making guns every day during their twelve year association with Bank of America.  It’s odd that BofA would suffer pangs of conscience for all that time, and then suddenly and completely sever what apparently was a reasonably healthy relationship.  One would be tempted to believe that there was, in Sherlock Holmes’ phrase, a “dog that didn’t bark.”

Bank of America has received nearly one hundred billion in TARP funds and loans directly from the Federal Reserve.  At its peak in February 2009, Bank of America was in debt to the government to the tune of $91.4 billion.

$ 91,400,000,000 gives the lender of those funds a lot of leverage, wouldn’t you say?  The lender could bring a lot of pressure to bear, easily affecting the behavior of the borrower, which in this case is the Bank of America.

Bank of America hints at that when, during his meeting with McMillan officials, Mr. Fox of BofA was asked “So you are telling me this is a politically motivated decision, is that right?”  Mr. Fox then reportedly replied in the affirmative.

One might suspect that there was significant political pressure brought to bear on Bank of America by someone in Washington in order to financially damage, if not cripple, a gun manufacturer.

Liberal-Progressive-Democrats have a long and well document history of animus regarding private ownership of guns, and no serious person could conceivably imagine any Republicans being in a position to exert that much influence over BofA.  So (and I will stipulate that this is merely a supposition without documentary evidence) it would seem that the Liberal-Progressive-Democrats may have used the power they have over the purse of a private enterprise to undermine and possibly destroy another private enterprise that they hold in disdain.

The question must be raised by those responsible to the millions of stockholders who actually own most large corporations, “Are we next?  Should we look for a new bank?”

It might also be time for Congress to closely question BofA, under oath, as the rationale for terminating their relationship with McMillan.  Not only asking why it was terminated, but who made the decision to cut it off.  The House Financial Services Committee, headed by Congressman Spencer Bachus (R-AL) might be the prime committee for this inquiry, or perhaps the Joint Economic Committee chaired by Senator Bob Casey (D-PA).

Considering the state of the nation’s economic fragility, any disruption to the financial system can have catastrophic consequences, and should foster a sense of urgency and alarm, if to no one else, the 469 members of the House and Senate who are up for re-election in November.

Realistically, major corporations have a limited array of banking options.  Can anyone see Caterpillar Tractor going down the street to the local savings and loan or credit union to secure a $500 million line of credit?  How about Exxon?  Or any other Fortune 500 organization.  If Liberal-Progressive-Democrats are able to pressure major banks into this type of behavior, are they finally in possession of the ultimate weapon of leftist destruction?

None of the Fortune 500 companies are involved in an illegal activity.  Of course neither was McMillan Group International.  Yet McMillan is being cut off from the life blood of American capitalism – money.

If the Federal Reserve or the Treasury department or certain individuals in the government influenced Bank of America to cut off its relationship with one legally operating private entity, what would prevent them from doing so with more such entities?  Say, a coal company.  Or an oil company.  Or perhaps a television network.  Or a health insurance provider.   These are further questions that should be addressed by either (or both) of the aforementioned Congressional committees.

Do the CEO and CFO of every company in America have to look at their business and ask themselves if their organization is likely to incur the wrath of someone in the Liberal-Progressive-Democrat power structure?  How worried should they be?

Even more unnerving, what if a bank threatened to sever its relationship with a state or municipal government?  A red state, or perhaps a swing state.  And then have President Obama metaphorically ride into town on his white horse to “save the day”.  This is an election year, after all.

Don’t automatically assume that it couldn’t happen. Look back over the past three years at what Washington had done to us, and see how many things that “couldn’t happen”, actually have.


About Jim Yardley

Retired after 30 years as a financial controller for a variety of manufacturing firms, a two-tour Vietnam veteran, and independent voter.
Gallery | This entry was posted in Business, Economy, Gun Control, Jobs and tagged , , , , , , . Bookmark the permalink.

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