Banks have been under pressure to cut ties with the private prison industry since U.S. President Donald Trump’s restrictions on immigration.
France’s BNP Paribas said Friday it will no longer finance U.S. private prison operators, making it the first foreign bank to distance itself from a sector shunned by domestic peers amid controversy over the Donald Trump administration detention policies for immigrants and asylum seekers.
Company spokesman Ilias Catsaros told Reuters of the change in policy. The decision does not effect existing contractual agreements.
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. and GEO Group Inc.
Last year, lenders raised roughly US$1.8 billion for CoreCivic and GEO Group, according to Refinitiv data.
Earlier in 2019, Sun Trust Banks Inc, Wells Fargo & Co., J.P. Morgan Chase & Co. and Bank of America Corp. made similar commitments to phase out lending to private prison companies after a damning report issued in April about the financing of investment banks in the private bank system.
The detention centers account for about two-thirds of the people held by U.S. Immigration and Customs Enforcement, S&P Global Ratings estimated last year.