ALBANY — Banks in the Big Apple could soon be barred from investing in private prisons and immigrant detention facilities.
State Sen. Brian Benjamin (D-Harlem) is unveiling legislation Saturday that would prevent any “state chartered banking institution” from financing or investing in the for-profit prison industry.
The bill comes as mounting criticism has led a host of major financial institutions, including JP Morgan Chase and Wells Fargo, to divest from businesses whose main goal is keeping people behind bars.
“This bill moves the conversation along,” Benjamin said. “Public pressure matters. You may have your money deposited in one of these banks and you don’t even know that that bank is lending money to an industry that harms your community.”
While illegal in New York, private prisons hold about 8% of all U.S. prisoners and 19% of all federal prisoners, according to the Bureau of Justice Statistics. Roughly 75% of all immigrants detained by Immigration and Customs Enforcement are being held in private prisons.
An August 2016 directive from the Obama administration called on the Bureau of Prisons to phase out federal use of private prisons, but President Trump rescinded the order.
Critics have increasingly targeted the prisons and detention centers over inhumane conditions, low pay for workers and President Trump’s reliance on the facilities to hold migrants under his “zero tolerance” immigration policy.
A report by research group In the Public Interest analyzing financial backers of the industry noted that by providing “debt financing, the banks are complicit with the private prison companies in contributing to and enabling mass incarceration and the criminalization of immigration.”
Banks currently provide more than $2.6 billion in credit to the industry, the report found.
Benjamin has targeted the industry in the past, introducing a bill in 2017 that preceded state controller Thomas DiNapoli divesting the state pension fund from companies with ties to privately run prisons.
A representative for CoreCivic, one of the industry leaders, defended the company, saying it merely “helps keep communities safe, enrolls thousands of inmates in reentry programs that prepare them for life after prison and saves taxpayers millions.”
“Unfortunately, much of the information about our company being shared by special interest groups is wrong and politically motivated, resulting in some reaching misguided conclusions about what we do,” Amanda Gilchrist, the firm’s public affairs director said.
Benjamin’s bill will make it so that no bank chartered by New York state “shall provide financing for or invest in the stocks, securities, or other obligations of any institution, company, or subsidiary that owns or contracts with a government to manage or run a prison.”
The lawmaker noted that small, local banks are unlikely to have relationships with private prisons, but some foreign banks chartered in New York State, including Barclays and BNP Paribas, have significant ties to the industry.
A representative for Barclays declined to comment on the bill.
A group of Congressional Democrats, including Reps. Jerry Nadler, Adriano Espaillat, Gregory Meeks, will join Benjamin Saturday outside of a Bank of America branch in Harlem as he announces the bill.
The presence of the Washington elected officials should be a message to larger, federally-chartered financial institutions that legislation at the state-level is only one step in a grander plan to disrupt the private prison system, according to the lawmaker.
“We’re putting other, federally-chartered banks on notice, they can see that we’re moving on the state level and we’re going to be focused on getting federal support and to have those members standing there is a signal,” he said.