New York Leans on Insurance Companies to Hurt the NRA

Kerry Worthington (L) was one of a small group of protestors at the National Rifle Association's Annual Meetings and Exhibits in Indianapolis, Ind., on April 15, 2023. Michael Clements/The Epoch Times

Recent government efforts to control speech go beyond social media postings to include banking and, most recently, insurance.

On Nov. 3, the Supreme Court agreed to hear the case in which the National Rifle Association (NRA) is suing Maria Vullo and the New York State Department of Financial Services (DFS), which she formerly led.

The NRA charges that New York regulators pressured insurance companies to cancel policies for the gun rights advocacy group, effectively threatening its ability to operate. The lawsuit claims that this is a violation of free speech rights as much as an effort at gun control.

“It’s really frightening to think about a society where if the government doesn’t like your speech they can cancel your ability to do business,” Daniel Ortner, an attorney at the Foundation for Individual Rights and Expression (FIRE), told The Epoch Times.

“It’s a really disturbing picture, and I think it really does cross the line when you get to that level of coercion.”

According to the suit, National Rifle Association v. Vullo, the DFS under Ms. Vullo issued “guidance” to insurance companies that instructed them to consider the “reputational risks, that may arise from their dealings with the NRA or similar gun promotion organizations.”

This notice followed the February 2018 school shooting in Parkland, Florida, in which 17 high school students and teachers were killed.

New York has argued that it merely issued advice and did not force insurance companies to cut off the NRA. The Second Circuit, which reviewed the case, agreed with New York officials and stated that even if they did violate the First Amendment, they had qualified immunity as public officials.

Plaintiffs, however, argued that the threat from regulators was clear, coming on the heels of a $13 million legal action by New York regulators against insurance companies that had written policies as part of the NRA’s “Carry Guard.”

That program protected gun owners if they were sued in incidents of self-defense with a firearm. In charging the insurance companies, New York argued that the Carry Guard policies insured criminal acts and were therefore illegal.

The District Court’s decision will “embolden other officials—including college and university administrators—to establish and maintain informal censorship regimes that target disfavored points of view,” FIRE argued in an amicus brief to the case.

According to Jeremy Tedesco, senior counsel for the Alliance Defending Freedom (ADF), this is the latest in a long line of attempts by the government to control speech by pressuring financial institutions to cut off services to organizations whose views the government disfavors.

De-banking Disfavored Organizations

“There’s significant pressure on banks to de-bank people that the political left, especially, do not agree with,” Mr. Tedesco told The Epoch Times. “And this has been happening for years.

“The first time it really hit the primetime was Operation Choke Point under the Obama administration, where the federal government used federal banking regulators, very much in the same way New York is using their regulators in this case, to put pressure on banks, through the risk management and reputational risk management aspect of what they do, to de-bank disfavored industries that were completely legal, but that the Obama administration didn’t like for various reasons, including political reasons,” he said.

The NRA's national headquarters is in Fairfax, Virginia. REUTERS/Larry Downing/File

Operation Choke Point was a clandestine initiative by bank regulators at the FDIC and other agencies starting in 2013 under the Obama administration to pressure banks to stop doing business with gun shops and payday lenders.

Regulators communicated to banks that it could be too risky to have this type of client, and many banks promptly dropped them.

Operation Choke Point was halted by the Trump administration in 2018 when then-Assistant Attorney General Stephen Boyd officially ended it. However, financial censorship now appears to be on the rise once again.

“This has been with us for some time, but it’s really on the increase,” Mr. Tedesco said, “and the real problem in the banking context is vague reputational risk policies that the government uses as a tool through this regulatory oversight process to urge those banks to de-bank people and deny insurance coverage to people who they don’t like because of their views.”

Banks and insurance companies consider the risk to their reputations to be an important factor in choosing who they do business with. Reputational risk is a broad criterion, however, which can include virtually any controversial point of view.

Regulators use it as leverage to coerce financial institutions into dropping clients whose views regulators dislike, legal experts say.

Getting People to Police Each Other

Another New York law that critics say attempts to impose speech codes is its 2022 “Hateful Conduct Law,” which is also being challenged in the courts. Under this law, social media companies are forced to implement “hate speech” policies that mirror New York’s hate speech codes.

The Hateful Conduct Law further mandates that social media companies set up reporting mechanisms for the public to report offenses, and to respond to each report of an offense. In this way, the state, which cannot legally restrict speech itself, is able to get citizens to police each other’s speech, critics of the law claim.

The corollary policy at universities is what is known as “Bias Response Teams,” which many universities have established to “encourage students to formally report fellow students or faculty members whenever they perceive that their speech is ‘biased,’” FIRE states.

In line with this movement, Bank of America and JPMorgan Chase have been accused of closing clients’ bank accounts because of their political or religious beliefs.

In April, Bank of America was accused by one of its clients, Indigenous Advance Ministries, a Christian ministry that operates in Uganda, of closing its accounts because of its religious views.

Bank of America denied the allegation, stating that it “doesn’t offer banking services to organizations that provide debt collection services for a variety of risk-related considerations and doesn’t serve small businesses operating outside the United States.”

In 2022, former U.S. Sen. Sam Brownback (R-Kan.) made similar allegations against JPMorgan Chase regarding the abrupt closing of accounts for his organization, the National Committee for Religious Freedom.

Mr. Brownback, a former ambassador and Kansas governor, said that JPMorgan Chase said it would reopen the organization’s accounts if it revealed the names of its donors. Then, “Chase pivoted to a different explanation,” Mr. Brownback stated, “saying in an email that I am a politically exposed person.”

The National Rifle Association v. Vullo case appears to have angered not only free speech and gun rights advocates but gun control activists as well.

Vox, a left-wing publication, ran a news report under the headline: “A foolish state official may have just handed the NRA a big Supreme Court victory.”

The article argued that “Democrats need to be smarter while the GOP controls the Supreme Court,” calling the action by New York regulators “incomprehensibly stupid.”

The Supreme Court is expected to rule on the case by the summer of 2024, Mr. Tedesco said.