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.’’
Key Speakers At The Bloomberg Year Ahead Summit
Photographer: Michael Nagle/Bloomberg
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.
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.
Shares of two of the largest private-prison companies, GEO Group Inc. and CoreCivic Inc., fell as much as 3.8% and 3.5%, respectively, Wednesday. They both dropped at least 17% last year.