Bank of America Corp., the second-biggest U.S. bank, will stop lending to companies that run private prisons and detention centers.
“We have decided to exit the relationship’’ with companies that provide prison and immigration-detention services, Vice Chairman Anne Finucane said Wednesday in an interview. “We’ve done our due diligence that we said we would do at the annual meeting, and this is the decision we’ve made.’’
The move followed a review by the bank’s environmental, social and governance, or ESG, committee, which included site visits and consultation with clients, civil rights leaders, criminal justice experts and academics. The Charlotte, North Carolina-based lender also met with its internal Hispanic and black leaders.
The company will stop its activities in the industry as soon as it can, while meeting contractual obligations, said Finucane, who leads Bank of America’s ESG efforts.
Steve Owen, a CoreCivic spokesman, said Bank of America misrepresented the company and based its decision on politics.
“We care deeply about doing business in an ethical, responsible way,” he said in an emailed statement. “This was clearly not a fair, transparent and genuine dialogue about corrections and detention.”
JPMorgan Chase & Co. took a similar step in March, breaking off its relationship with the industry after deciding it was too risky, and Wells Fargo & Co. is also halting loans to the industry. Protesters have been urging bank executives to back away from the business, and shares of several prison companies slumped last week after presidential candidate Elizabeth Warren tweeted about her plan to get rid of them.“The broader issues are the need for reforms in the criminal justice system and immigration,” Finucane said.
While the companies run centers on behalf of U.S. Immigration and Customs Enforcement, they’ve said they don’t operate facilities that house unaccompanied minors. Detention centers have become a flash point in recent weeks amid reports of substandard conditions at facilities for migrant children. Warren also criticized Caliburn International Corp. for profiting off what she called the Trump administration’s “inhumane” immigration policies.
“The GEO Group has never managed any facilities that house unaccompanied minors, nor have we ever managed border patrol holding facilities,” GEO Group Chief Executive Officer George C. Zoley said in a statement.
Representatives for Caliburn weren’t immediately available to comment.
The U.S. and China declared a truce in their trade war on Saturday, as Donald Trump said he would hold off imposing an additional $300 billion in tariffs and the world’s two largest economies agreed to resume negotiations.
After a high-stakes meeting with Chinese President Xi Jinping, Trump told reporters on Saturday that he also would delay restrictions against Huawei Technologies Co., letting U.S. companies resume sales to China’s largest telecommunications equipment maker.
Trump outlined the deal following the Group of 20 summit in Osaka, Japan, but the White House released no details about the arrangement worked out by the two leaders. The president’s comments may remove an immediate threat from a trade war looming over the global economy even as a lasting peace remains elusive.
After Trump and Xi met at the G-20, the two governments plan to restart trade talks that broke down last month. As part of the arrangement, the president said Xi promised to buy “tremendous” amounts of U.S. agricultural products, but Chinese official media reports said only that Trump hopes China will import more American goods as part of the truce.
The decision to ease up on tariffs comes less than two weeks after he formally began his 2020 re-election bid, focusing on a strong U.S. economy and his tough stance with the rest of the world. At his June 18 campaign event in Florida, Trump said tough U.S. measures were adding billions to the Treasury and prompting companies to leave China to avoid the fees.
While the resumption of U.S.-China talks was welcomed, International Monetary Fund Managing Director Christine Lagarde warned that the global economy is in a “rough patch” with unresolved issues on trade posing the most serious risk for the future.
“Tariffs already implemented are holding back the global economy, and unresolved issues carry a great deal of uncertainty about the future,” she said in a statement.
Trump told reporters he wouldn’t put additional tariffs on China for the “time being,” and that he’ll allow U.S. companies to supply gear to Huawei.The Commerce Department last month blacklisted the company for national security reasons.
The Trump administration has been lobbying allies around the world not to buy Huawei equipment, which the U.S. says could be used for Chinese espionage. The company has denied the allegation. China has said it wanted Huawei removed from Commerce’s blacklist as soon as possible and has accused the U.S. of unfairly using state power to harass a private company.
“U.S. companies can sell their equipment to Huawei,” Trump said. “We’re talking about equipment where there’s no great national security problem with it.”
Trump didn’t suggest he was relenting on plans to ban the import of Huawei equipment for
new U.S. 5G telecommunications networks, which is the top concern of intelligence agencies.
But in the U.S., Senate Minority Leader Chuck Schumer, a New York Democrat, said the decision damages U.S. negotiating efforts on trade.
“Huawei is one of few potent levers we have to make China play fair on trade,” Schumer said Saturday in an emailed statement. “If President Trump backs off, as it appears he is doing, it will dramatically undercut our ability to change China’s unfair trades practices.”
Senator Marco Rubio a Florida Republican, suggested legislation would be passed -- with what he said is a veto-proof majority -- to keep the limits in place.
The return to the negotiating table ends a six-week stalemate that has unnerved companies and investors, and at least temporarily reduces fears that the world’s two largest economies are headed into a new cold war. Still, it’s unclear whether they can overcome differences that led to the collapse of a previous truce reached at the G-20 in November.
Trump and top officials in his administration alleged that Beijing had reneged on provisions of a tentative trade deal. It’s not clear if Xi agreed to return to previous agreements as part of the new truce.
Trump said he had not yet decided how to allow U.S. companies to continue selling to Huawei or whether to remove the tech giant from the Commerce Department’s entity list. He said he would meet with advisers next week to determine how to proceed.
“As for President Trump’s comments that some restrictions on Huawei will be removed, we will of course welcome this if those words are put into action,” Chinese diplomat Wang Xiaolong said at a briefing at the G-20.
The move to blacklist Huawei was seen as a major escalation that could hurt the company’s supply chain. It had also prompted lobbying from U.S. companies like Intel Corp. and Alphabet Inc.’s Google, worried about losing their sales to a major client.
“I like our companies selling things to other people, so I allowed that to happen,’’ he said.
It was not clear how long the exemption would last. Trump said he had agreed with Xi to wait until the very end of trade talks to resolve broader issues around Huawei, including Washington’s lobbying campaign against allies buying its 5G equipment.
“Huawei is a complicated situation,” Trump said. “We’re leaving Huawei toward the end. We’ll see where we go with a trade agreement.”
The move is likely to draw criticism in Washington where national security hawks have urged Trump not to ease any pressure against Huawei. The company has long been the target of concern at the Pentagon and intelligence agencies in part over what the U.S. claims are its close ties to the Chinese military.
Trump said he didn’t discuss the case of Meng Wanzhou, the daughter of Huawei founder Ren Zhengfei, who has been under house arrest in Vancouver since being detained by Canadian authorities on Dec. 1 last year over a U.S. extradition request.
The U.S. has accused Meng of tricking banks into conducting more than $100 million worth of transactions for Huawei that may have violated U.S. sanctions on Iran. Meng faces multiple criminal charges in the U.S., including bank and wire fraud, money laundering and conspiring to obstruct justice, each of which carries a maximum sentence of 30 years in prison.
Since trade talks collapsed on May 10, Trump has raised tariffs on $200 billion of Chinese goods to 25% from 10%. He had indicated before the G-20 that the next step could be a 10% tariff on all remaining imports from China -- some $300 billion worth, from smartphones to children’s clothes.
Concern about the standoff has prompted investors to bet on central-bank easing and pile into havens. Treasury yields have tumbled to their lowest level in years. The Japanese yen, a traditional beneficiary of flight to quality, has gained, while the U.S. dollar has slipped across the board, including against China’s yuan. Stocks have seesawed on each new twist in the trade tug-of-war.
Xi spent much of the summit’s first day Friday promising to open up the Chinese economy, and chiding -- though not naming -- the U.S. for its attack on the global trading system.
In remarks to African leaders on Friday, Xi took a not-so-subtle swipe at Trump’s “America first” trade policy, warning against “bullying practices” and adding that “any attempt to put one’s own interests first and undermine others’ will not win any popularity.”
Xi also called out the U.S. over Huawei and said the G-20 should uphold the “completeness and vitality of global supply chains.” China insisted this week that Huawei must be removed from the blacklist under any deal.
— With assistance by Margaret Talev, Nick Wadhams, Jennifer Jacobs, and Peter Martin