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JPMorgan Blocked From Texas Muni-Bond Market Over Anti-Gun Virtue-Signaling

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=87R&Bill=SB19
https://www.bloomberg.com/news/articles/2021-09-30/jpmorgan-says-texas-gun-law-blocks-bank-from-muni-bond-deals
https://www.bloomberg.com/news/articles/2021-05-13/texas-advances-bill-targeting-bofa-citi-over-gun-policies

Following Texas lawmakers' decision to ban local government from
working with Wall Street banks whose policies restrict the firearms
industry, it appears JPMorgan is the first of the virtue-signaling
banks to feel the pinch from the new law.

Earlier this year, JPMorgan CEO Jamie Dimon told a Congressional
committee that his bank won’t finance gun companies that make
military-style weapons for consumers.

In May, the Texas House of Representatives passed the bill that would
block the state and local governments from contracting with banks and
other financial-services companies that have policies that limit their
work for the firearms or ammunition industries. The legislation
reflected 2nd Amendment rights supporters' furore over corporations
pushing themselves into the increasingly divisive policies of
America’s identity-politics wars.

And now, as Bloomberg reports, the first impact of the law is hitting
Wall Street.

This week, JPMorgan was replaced by UBS as the underwriter of a bond
issue for the Decatur authority, an arm of a 7,000-person Texas city
that operates Wise Health System.

In July, the agency had disclosed that it was planning to have
JPMorgan serve as senior managing underwriter on a financing that
could include the sale of up to $150 million of bonds.

The authority cited “uncertainty related to the implementation of new
legislation passed by the State of Texas,” though it didn’t specify
which law.

Texas’ fast-growing population has made it one of the biggest markets
for the muni-bond business and more troubling for the banks in general
is the fact that Texas-based issuers accounted for $58 billion of debt
sales in 2020, the second-most of any state behind California,
according to data compiled by Bloomberg.

JPMorgan was credited with working on $3.6 billion of long-term
municipal-bond deals in Texas in 2020, according to data compiled by
Bloomberg.

Now that's a lot of fees that JPMorgan, BofA, and Citi will be missing
out on from here:

    “While our business practices should permit us to certify, the
legal risk associated with this ambiguous law prevents us from bidding
on most business right now with Texas public entities,” Patricia
Wexler, a spokesperson for the bank, said in an emailed statement.

Three words summed it all up to us - broke banks mounting!