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BNP Paribas backs away from US private prison industry
[NEW YORK] France's BNP Paribas on Friday said it will no longer finance US private prison operators, the first foreign bank to distance itself from a sector shunned by domestic peers amid controversy over Trump administration detention policies.
Company spokesman Ilias Catsaros told Reuters of the change in policy. The decision does not effect existing contractual agreements.
Banks have been under pressure to cut ties with the private prison industry since US President Donald Trump's restrictions on immigration raised concerns about detention centre conditions.
The centres account for about two-thirds of the people held by US Immigration and Customs Enforcement, S&P Global Ratings estimated last year.
BNP Paribas is one of several banks that have underwritten bonds or syndicated loans for at least one of the major private US prison operators, CoreCivic and GEO Group.
Last year lenders raised roughly US$1.8 billion for CoreCivic and GEO Group, according to Refinitiv data.
Earlier this year, SunTrust Banks, Wells Fargo, JPMorgan Chase and Bank of America made similar commitments to phase out lending to private prison companies.
Private prison operators have argued that activists mischaracterise the nature of their facilities, and called the decisions politically motivated.