Citizens Bank to end lending ties with private prison firms

Citizens Bank said it will wind down its lending relationships with CoreCivic and The GEO Group, two private prison companies involved in federal immigration detention work. The decision follows pressure from advocates and some local governments over the bank’s role in financing companies tied to ICE detention under President Donald Trump.

Citizens said the move is based on business conditions rather than politics. The bank said the federal government’s plans involving facilities run by CoreCivic, and talks involving GEO, have reduced the companies’ need for the type of financing Citizens had provided.

CoreCivic and The GEO Group own or operate private prisons around the country, Fortune reported. Both companies have received contracts from U.S. Immigration and Customs Enforcement to operate detention or deportation facilities as part of the Trump administration’s immigration enforcement agenda, according to Fortune.

Advocacy groups had pushed Citizens to sever ties with the companies. Fortune reported that at least two New Jersey city councils, Montclair and Jersey City, voted to pull municipal funds from Citizens if the bank kept doing business with the private prison operators.

The De-ICE Citizens Bank Coalition praised the bank’s announcement. The coalition said Citizens’ plan to exit its current lending relationships with CoreCivic and GEO was a victory for people who opposed bank financing connected to ICE detention activity under the current federal administration.

Citizens rejected the idea that the decision signaled a new view of the two companies. In a statement, the bank said the move was “a business decision based on changed commercial circumstances” and did not reflect a changed assessment of CoreCivic’s or GEO’s business models or operations.

The bank also pointed to the regulatory risks surrounding decisions to deny or end banking services. The practice, known as debanking, has become politically sensitive during Trump’s second term, Fortune reported.

Under the Trump administration, bank regulators have been examining debanking practices, Fortune reported. Those reviews could lead to fines or penalties if regulators find that banks acted improperly in ending services for certain customers.

Citizens said all banks, including itself, must weigh regulatory and contractual rules when deciding which customers to serve. Its statement framed the CoreCivic and GEO decision as a response to changed financing needs, even as advocates described the announcement as the result of public pressure.

This story draws on original reporting from Fortune.