….These efforts started with Citicorp saying it would forbid its retail clients — businesses that, for example, receive loans or offer store credit cards — to sell guns to anyone who didn’t pass a background check (which is already the law for licensed gun dealers). It also barred sales to customers under 21, as well as sales of bump stocks.

Bank of America followed, saying it would no longer lend money to manufacturers of “military style” weapons. (Bank of America was in a particularly interesting position since it was part of a group refinancing Remington Outdoor, a major manufacturer of assault weapons, as it emerged from bankruptcy.) BlackRock Funds, the world’s largest asset manager, said it would offer a new investment fund that excluded gun manufacturers and sellers.

In the resulting outcry, part of the problem was that the discussion mixed up two very different issues: the willingness of banks to lend money to weapons manufacturers and the ability of consumers to use credit cards to make purchases. While banks’ lending policies can have a devastating impact on the companies denied financing, there is no inherent right to a loan from any bank. But if the banks use their financial clout, which they maintain under federal oversight, to impose restrictions on companies’ sales practices, that is a significant step toward a bank-imposed gun-control regime — one that could ultimately choke off the right of consumers to purchase legal products.

When so-called socially responsible lending and investing crosses over into ordering companies to stop selling certain products or to curtail sales to certain buyers, banks begin assuming a power that no one voted to give them. And one needn’t be an alarmist to understand that once financial institutions are allowed to start down this road, they could end up curtailing the rights of businesses and consumers in a way that is incompatible with democracy…..