Home Depot & Citi Bank vs the shooting industry

[GunsAmerica Fan]

Guys,

I am the first who will line up against a company for being anti 2nd Amendment rights but this has nothing to do with it.

It was clearly a mistake by the people administrating the HD credit accounts, unless this company does have military supplier IDs on some of their products in which it would be justified.

The policy is clearly against companies who make firearms for the military. It is about risk management, not about guns. At some point their underwriting department determined that the risk factor for that particular type of supply was risky and that the companies who had Citi cards and were supplying the military with firearms were defaulting on their corporate debt.

It is no different than your local pharmacy not taking Medicaid, because Medicaid has a habit of coming back two years later, raiding your books and taking back money they paid you, claiming that they were false claims. It's just business and it has nothing to do with guns or RKBA.

There are issues with First Data as above and that CDNN article is now famous, but if I discuss the research that I did the mods will demerit me and tell me I am hijacking yet another thread to promote my business. I advise anyone who sells guns with a merchant account to look into the policies of their provider, even if they got their merchant account through a RKBA sponsored provider. Everything is not as it seems and you may be financing a very anti-gun wing of the credit industry.

This case however has nothing to do with it.

 

[Old Fuff]

I picked up the story on The Shooting Wire, and I have found it to be a pretty reliable source.

Anyway the explanation concerning the military doesn’t wash. The company that is involved is a small manufacturer who makes scope rings and related products. They have never sold anything to the military services. They applied to Home Depot for credit because they wanted to buy materials to be used to increase the size of their factory. At no time was their credit worthiness questioned.

At the Shooting Wire this matter is still under investigation, but any reference to the military in any context is a red hearing.

 

[bellemare]

i don't do business with citi, but that's because they're a national bank. i do as much of my money stuff as possible with my local credit union

 

[Jorg Nysgerrig]

Old Fuff, see the comment from the NRA-ILA. http://www.nraila.org/legislation/read.aspx?id=6050

Let's apply Occam's Razor to the two scenarios:

Scenario A: Citi trying to undermine the Second Amendment by preventing Warne from expanding their shop through restricting their line of credit, despite the fact the extend credit to a number of other gun related businesses because they secretly know that without scope rings, guns are useless.

- or -

Scenario B: Warne was misclassified as a military supplier due to either something in their application or a simple clerical error as being in a high-risk industry that Citi doesn't serve for business reasons.

One of those scenarios seems a lot more likely than the other.

I suppose one could insist the NRA-ILA is in bed with CITI and is just covering for them as part of the conspiracy to slow the production of scope rings.

 

[Old Fuff]

Were it not for the previous matter concerning Citi Bank and CDNN Sports I might park my tinfoil hat...

But the article I refered to in The Shooting Wire made it pretty clear that the company had tried to straighten things out and met a brick wall.

The editor, Jim Shepard, made it clear that his investigation would continue - with follow-up reports. I will await them with interest.

It will also be interesting to see how far the NRA gets with Citi in attempting to resolve the matter, and I'm sure a report to the members will also be forthcoming.

In the meantime, my opinion of Citi is such that it couldn't get past Art's Grandma...

 

[joed70]

I quit doing business w HD for more reason that that. They financially support some organizations that I strongly disagree with.. Lowes is only a block away.........

 

[Bonesinium]

As I look at my Government Travel Card I see that it says Citi on it. So what does prohibiting financing for companies that makes stuff for the military do when they extend credit directly to the military?.....

 

[JohnBT]

"if such political sides mean oh so much, you, the customer, would look into such policies BEFORE being a customer"

Do you really believe there is somebody out there with enough time to research every single outfit they do business with day in and day out? Get serious.

 

[tuckerdog1]

The HD where I live gives a 10% discount for all active & former military 365 days a year.

I like 'em.

Tuckerdog1

 

[22-rimfire]

I'm not a fan of Citi Bank. I'm not particularly a fan of Home Depot. I only visit their stores if there is no other practical choice or Lowe's doesn't have it. The fact is I go to Ace Hardware over Home Depot because they are locally owned.

 

[SSN Vet]

Why would anyone even consider banking with Citi?

There being investigated for major fraud...

They hate there customers....

They're the absolute worst when it comes to corporate social engineering....

Let 'em figure out how to conduct business without customers and rot in the grave they created for themselves is my opinion.

 

[Zoogster]

So what does prohibiting financing for companies that makes stuff for the military do when they extend credit directly to the military?

It is not about not supporting the military, it is about how the military handles contractors. Which makes many types of government contractors quite risky to lend to.
The military will often have bidding wars (lowest bidder wins) to make a product that fits a specific need. These companies then often borrow millions of dollars (or billions) to build a product they hope to make lots of profit selling to the military.
Sometimes the military creates a contract with several competing companies at once to build similar things.
Then all of a sudden the military will cancel a project. It does not matter if the company just spent millions of dollars and went into debt to fulfill a contract, the contract is terminated.
The profit intended by the company never comes and if they are not big enough to absorb the blow they default on their debts or file bankruptcy.
The bank that lent the money now made a bad loan.

The military itself however is a much more reliable borrower of money, as it is backed by tax payers and politicians that borrow against those tax payers.

Just look up the latest warship or military aircraft and you can find this situation. Sometimes the military throws them a smaller project to keep the contractor afloat so they don't cease to exist (which helps the military in the long run by keeping competing companies they have a relationship and history with around to domestically build important products in the future.)
But that courtesy it typically extended to the larger ones, the smaller contractors simply are left to collapse.

You can have a contract canceled as a contractor for no reason by the military with little recourse. If they order 5 million of something and you build a facility and obtain all the material to create 5 million of them and they cancel it, you are stuck.
If you are building some unique thing and there is a change in projected costs because a new issue pops up and you don't have the personal phone number of important people in Washington, you can get instantly canceled even if everything else is going great.
The military is a very lucrative client if things work out, but it also has higher risks with less recourse than most clients in the civilian economy.


For all these reasons it is very dangerous to loan money to a military contractor. Unless they are one of the larger established contractors that can continue paying for the loan even if they end up screwed on an individual contract, and will likely succeed with another contract soon in the future.

 

[Tinpig]

Hope Home Depot doesn't want our military to protect their buildings if there's ever an invasion. Might go against their policy.

Home Depot is not anti-military. They give discounts to veterans and active duty, and they have an extremely positive hiring policy with regard to former military.

Tinpig

 

[Old Fuff]

Apparently Home Depot is an innocent party in this mess. They took the application and approved it. But Citi Bank is the outfit that actually issues the card, and they were the one that rejected the application. After that there was nothing the manager at the local Home Depot could do.

On the other hand, If Home Depot catches enough flack for what Citi did they might get a different credit card provider.