BNP Paribas backs away from U.S. private prison industry
Reuters
Published Jul 12, 2019 08:36PM ET
BNP Paribas backs away from U.S. private prison industry
By Imani Moise
NEW YORK (Reuters) - France's BNP Paribas SA (PA:BNPP) on Friday said it will no longer finance U.S. private prison operators, the first foreign bank to distance itself from a sector shunned by domestic peers amid controversy over Trump administration detention policies.
Company spokesman Ilias Catsaros told Reuters of the change in policy. The decision does not effect existing contractual agreements.
Banks have been under pressure to cut ties with the private prison industry since U.S. President Donald Trump’s restrictions on immigration raised concerns about detention center conditions. The centers account for about two-thirds of the people held by U.S. Immigration and Customs Enforcement, S&P Global Ratings estimated last year.
BNP Paribas is one of several banks that have underwritten bonds or syndicated loans for at least one of the major private U.S. prison operators, CoreCivic Inc (N:CXW) and GEO Group Inc. (N:GEO) Last year lenders raised roughly $1.8 billion for CoreCivic and GEO Group, according to Refinitiv data.
Earlier this year, SunTrust Banks Inc (N:STI), Wells Fargo & Co (N:WFC), JPMorgan Chase & Co (N:JPM) and Bank of America Corp (N:BAC) made similar commitments to phase out lending to private prison companies.
Private prison operators have argued that activists mischaracterize the nature of their facilities, and called the decisions politically motivated.
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Written By: Reuters
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