New gun law complicates banks' security concerns

Northwestern Financial Review, Jun 15-Jun 30, 2003 by Bengtson, Tom

I can't believe the Minnesota legislature passed a conceal and carry gun law in April. As of May 28, it became much easier for Minnesotans to obtain a permit to carry a concealed hand gun in public places. The Minnesota Bankers Association noted in a bulletin to members that over the next three years, the number of people with such permits is likely to increase to 90,000 from the current 12,000.

I hate to think of the security concerns this raises for bankers. Imagine a situation where a citizen has legally carried a concealed gun into the lobby of a bank. Then suppose that person sees a robbery taking place at the teller window. Does the citizen get involved and draw his gun, or does he stand there and watch the robbery take place? Then what happens if another customer in the bank is injured during the robbery and later learns that a gun-carrying customer did not act during the robbery. Does the injured customer have the right to sue the gun-carrying customer for failing to intervene? Such situations conjure a world of conflicting emotions.

Lobbyists for the banking industry note they succeeded in watering down the gun legislation. Early versions of the bill would have required business owners to maintain a firearms lockbox where gun-carrying customers could deposit their weapons before entering the business. That idea was defeated.

Private businesses, such as banks, can post signs in their entryways, stating that guns are not allowed in the building. Banks can also bar their employees from carrying guns while on the job.

More guns in busy commerce areas just doesn't seem like a good idea to me. As a pilot, I know there are restrictions about flying over densely populated areas that don't apply to flying over sparsely populated areas. The rules exist not because anyone expects a pilot to crash into a crowd, but to mitigate the consequences of an accident. Seems to me the same should apply to firearms. No one expects anyone to use these guns in crowded places, but a few rules might make sense to mitigate the consequences of an accidental shooting.

Advocates for the law note that in the 34 other states that have conceal and carry laws, crime has gone down, and the rate of gun accidents has not increased appreciably. It will be interesting to see what happens in Minnesota.

* * *In the June 1-14 edition, I wrote about the possibility of Wal-Mart purchasing an industrial loan company. Let me provide a few facts here to add perspective to the discussion. Wal-Mart is the largest retail company in the world, with 1.3 million employees (962,000 employees working in 3,200 stores in the United States). The company reported sales of $218 billion last year. Wal-Mart says on its Web site that 100 million people per week visit a Wal-Mart store.

With respect to industrial loan companies, there are only 50 of them in the country. Most are modest in size - 17 have less than $100 million in assets; only 10 have more than $1 billion in assets. Utah has 24 ILCs, and California has 18. Colorado has four, Minnesota has two, and Nevada and Indiana each have one.

* * *I had been hearing rumors for months that the Wisconsin Department of Revenue was looking hard at banks that have investment subsidiaries in other states. Now the Capital Times, one of the Madison newspapers, has run a three part series on that topic. In the stories, Department of Revenue Secretary Michael Morgan confirmed the rumors, saying that his department will take a tough look at banks through the audit process.

After Wisconsin passed a franchise tax in the late 1980s that applied a new tax to municipal bonds and Treasury securities held by banks, many banks set up investment subsidiaries in states that do not tax these investments. This tack by the Department of Revenue comes after several consecutive years of legislative effort to tax those out-of-state subsidiaries through a process they call "combined reporting." The bankers have been able to hold that effort back, but I'm not sure what a bank can do about a zealous tax commissioner eager to use his audit authority. He can't make up his own new taxing authority, but he can make a taxpayer's life hell by applying existing law in an onerous manner.

* * *Best wishes to Larry Eilers, the consummate salesman at Precision Computer Systems, who is retiring the end of July after 14 years with the company. The long-time Iowa resident moved to Tucson, Ariz., last December. Counting his years at Banks of Iowa and Burroughs Corp., Eilers has been calling on banks for more than 30 years.

"I just want to thank the bankers for the years of pleasure working with them," he commented. "The companies that I have worked for have had good products and services, but I appreciate the fact that they bought from me and not the company."