What right did Bank of America have to freeze American Spirit Arms accounts?

January 10, 2013

CBS 5 - KPHO

In an unusual move, a local Bank of America branch froze the operating account of a Phoenix area gun manufacturer. As reported by KPHO CBS channel 5 ("Valley gun manufacturer: BOA froze funds over product") by Greg Argos:

A local gun manufacturer says Bank of America withheld nearly $100,000 worth of deposits because of what he is selling. Joseph Sirochman owns American Spirit Arms in Scottsdale. The company manufactures high-end rifles like the AR15, M16 Rifle and M4 Carbine.

What is so unusual about what Bank of America did is that Mr. Sirochman and American Spirit Arms have not broken any laws, nor have they been sued. In other words, banks have the right to freeze a bank account, but it must be done pursuant to a court order. For example, if someone had sued American Spirit Arms and was attempting to collect a judgment by garnishing the bank account, then Bank of America has the obligation to freeze the account. 

But in this case, no such thing occurred, and in fact, Mr. Sirochman was in compliance with all laws: "We have all the proper licensing. We follow all the rules and regulations. We're audited by the ATF. We're visited by Homeland Security on a very normal basis." 

That, at least in my mind, brings up the obvious question: what was Bank of America doing freezing this bank account? According to Mr. Sirochman, the motivation was not legal, but political: "(Bank of America held the funds) because we are a firearms manufacturer, and that is in the political spotlight and they had a chance to slow us down," Sirochman said.

I am no fan of the gun lobby or the NRA, but Bank of America acting on its own and freezing Mr. Sirochman's operating account is very troubling. If we want to change our gun culture and our gun laws, then the way to do it is by changing our laws through the democratic process. We vote and support politicians who will enact strict gun legislation. 

If anything, Bank of America's illegal stunt will reinforce the belief among many gun rights advocates that big banks, big business, and big government are out to get them, and the only way to protect themselves is through the 2nd Amendment. In this particular case, the gun rights advocates just might be right.  

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