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Tina Casey headshot

Bank of America Finally Says No to Private Prisons

Bank of America has become the latest financial institution to cease any financial support for the private prison sector.
By Tina Casey
Bank of America

Bank of America has become the latest in a growing line of companies responding to the President’s immigration treatment on a bottom-line basis. Instead of tactics such as simply withdrawing advertising support from media organizations, these companies are demanding better behavior from their clients with a more direct form of punishment. For Bank of America and other leading financial institutions in the U.S., that means ending any financial support for the private prison and detention companies CoreCivic and GEO Group.

Brand reputation and the maltreatment of immigrants

President Trump’s policies on immigration and his administration’s treatment of immigrants have been scalding controversies ever since he took office in January 2017. A number of leading companies publicly protested his policies from the start. They have continued to speak out, partly in response to prompting from their employees.

Microsoft and other companies also stepped up the pace of resistance by contributing to or bringing legal action meant to block the President’s orders.

The Bank of America decision represents yet another level of corporate activism.

With brand reputation at stake, the bank, as well as other companies, are setting a higher standard for their business relationships.

The reputational concern is a legitimate one, and its significance is growing with every new story about child abuse at border detention facilities.

Earlier this week, for example, the online furnishing company Wayfair was hit with a firestorm of negative media attention over its handling of an order for hundreds of mattresses and bunk beds destined for a migrant children’s detention center.

Peer pressure: from environmental leader to human rights follower

Last year, Bank of America garnered a long list of awards and recognitions as a global environmental leader.

That leadership position, somewhat ironically, proved awkward for the bank as public outcry over immigrant treatment gathered steam this year.

Two other leading U.S. banks, Wells Fargo and JPMorgan Trust, dropped their ties with CoreCivic and GEO Group in January and March, respectively. The decisions followed months of pressure from a coalition of more than 70 human rights organizations using the hashtag #FamiliesBelongTogether.

That left Bank of America as the only one of the top six U.S. banks still enabling private prisons or detention centers through a financial relationship.

The bank’s situation recalled the awkward position maintained by Sandals, which became the only high profile brand to continue advertising on Laura Ingraham’s Fox News show after Bayer cut ties.

It also exposed Bank of America to renewed criticism over an immigration-related issue that emerged last summer, when it began freezing the accounts of individual clients over their citizenship status. The practice is a common one in other countries but highly unusual among banks in the U.S.

Bank of America scrambles to protect its brand

With lessons learned from the Wayfair debacle in hand, Bank of America finally took action. Earlier this week, the bank announced through a spokesperson that it is severing ties with private prison and immigrant detention companies at the state level, in addition to federal facilities.

According to a report in CNN, Bank of America was careful not to repeat the mistakes made by Wayfair. After discussions with the affected clients, the bank determined that a lack of “legal and policy clarity,” in combination with employee and community concerns, made it impossible to continue the relationships.

Events unfolding over the past few days have demonstrated that the decision most likely diffused what otherwise could have been a significant blow to the bank’s reputation. In fact, it seems that Bank of America has dodged a reputational bullet, as media attention has zeroed in on the Homestead detention facility near Miami, Florida. The facility is run by a current Bank of America client called Caliburn.

As reported by CNN and The Miami Herald, Homestead (shown above) does not describe itself as a prison, but “protesters say it functions as one. The minors held inside are not allowed to leave.”

When “satisfactory" is not good enough

Though a latecomer to the immigration debate compared to competitors such as Wells Fargo and JPMorgan Chase, Bank of America has added another important element to the business response over the President’s immigration policies.

According to the report in CNN, Bank of America made it clear that the clients in question had met satisfactory standards for taking steps to “properly execute their contractual and humanitarian responsibilities.” Nevertheless, the bank went ahead with its decision to cut ties.

In other words, Bank of America now can say that it has set an even higher moral standard for clients seeking its financial support.

As the 2020 presidential election cycle gets underway in earnest, more likely than not other leading businesses will strive to get ahead of the immigration issue on moral grounds, before they, too, are forced to play catch-up.

Image credit: UUSC/Flickr

Tina Casey headshot

Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes.

Read more stories by Tina Casey