Two days after 19 children, two teachers were killed in an attack on a Texas elementary school, an investment banking company sent a letter to Texas Attorney-General Ken Paxton promising to not “discriminate against” the firearms industry.

Cabrera Capital Markets, LLC, a Chicago-based bank, made the declaration to comply with Texas legislation that bars Texas state and local governments, as well as other institutions, from working with companies that prohibit investment in ammunition or firearms manufacturers. CBS News reviewed more than 80 letters and they highlight the difficult political environment that corporations face when responding to mass shootings.

The majority of institutions, including local businesses like the First State Bank of Uvalde and multinational corporations such as Barclays, submitted one of two standardized versions of the letter published both by Paxton’s Office and the non-profit Municipal Advisory Council of Texas. The form letters from the banks state that they have not adopted a policy, guideline, or directive that discriminates towards firearm entities or firearm trade associations.

Cabrera Capital Markets executives didn’t respond to phone calls and emails from CBS News.

Steven Craig, University of Houston economist, says the law is a reflection of the difficult waters many companies are facing in an age of more divided politics. He believes that corporations’ push to adopt political stances can lead to inefficiency in markets.

Craig stated that “the fact that they’re putting political risks in U.S. commerce activities is a sign we’re not having good times.” He also said that the law was a response to 2018 announcements by Citigroup and JPMorgan Chase that they would limit partnerships in firearms.

They clearly believed it would be a commercially profitable idea to inform their customers about what they were doing and to make these political judgements. Craig stated that they failed to consider the possibility that governments might react to their actions, as was the case in Texas.

Citi spokesperson pointed CBS News to a June 2021 blog post by the company responding to the Texas law. A CIti executive stated that the company’s policies had not changed since 2018 when Citi refused to take on clients from the retail sector or partners that sell guns to children under 21 years old, nor sell bump stocks or high capacity magazines.

JPMorgan sent a letter on May 13 to inform clients that it doesn’t discriminate against firearms manufacturers, but it “willn’t finance military-style weapons for civilian use.”

Emails seeking clarification from Paxton’s office on whether Citi and JPMorgan’s policies were discriminatory towards the firearms sector were not answered by Paxton’s office. The New York Times first reported JPMorgan’s letter.

Banks accused of lying to the Texas Law can face criminal prosecution.

Jeffrey Fagan, a Columbia University law professor, said that banks could soon need to meet regulators in other states that are trying to protect firearms makers. Fagan made a comparison between the rise of self-defense laws called “stand your ground” after one was passed in Florida.

“This template was widely spread across conservative states. It became, in a way, a type of contagion. Fagan stated that the idea and law are identical. “And I don’t see why this shouldn’t be subjected to the same type of contagion.”

According to the National Shooting Sports Foundation (a trade association representing the firearms industry), eight states, including Arizona, Kansas Kentucky, Missouri and Ohio, as well as South Dakota, West Virginia, West Virginia, West Virginia, South Dakota, Oklahoma, Oklahoma, Oklahoma, Oklahoma, South Dakota, South Dakota, South Dakota, South Dakota, West Virginia, and Missouri, are currently considering similar legislation.

Fagan wondered whether these laws would eventually run afoul a Supreme Court precedent relating to corporate speech.

“If we look back at Citizens United, investments made by corporations were allowed as political speech,” Fagan stated, referring specifically to the landmark Supreme Court decision in 2009 that prohibited the government from restricting corporate donations to political campaigns. “Why don’t we use an analogy to show that, if we ban companies from doing so, this infringes on their right for political speech?”