The City of Austin is under fire from Texas Attorney General Ken Paxton, who claims its multimillion-dollar contract with WEX Bank violates state law protecting gun-related businesses.
On June 16, 2025, Paxton issued a stark ultimatum to the City of Austin, demanding that the city government either amend or terminate its multimillion-dollar contract with WEX Bank by July 16, 2025. Should it fail to comply with Paxton’s demands, it could face potential legal action.
Paxton’s letter to the Austin City Council accuses the city of violating state law by conducting business with a financial institution that allegedly discriminates against the firearms industry.
The confrontation specifically focuses on Austin’s fleet card management contract with WEX Bank, which began on September 11, 2021, just ten days after Texas Senate Bill 19— the Firearms Industry Nondiscrimination (FIND) Act—went into effect.
The legislation bans government entities from entering into contracts valued at $100,000 or more with companies that discriminate against businesses associated with the firearm and ammunition industries.
At the heart of Paxton’s accusations lies the case of Defense Solutions Group (DSG), a Texas-based military and law enforcement supplier that specialized in high-end equipment. Per Paxton’s letter, DSG experienced what he described as “politically motivated debanking” after WEX Bank acquired their credit card payment processing service provider.
On June 2, 2021, Gene Bell, director of client services for WEX Bank, sent DSG a letter informing them that the bank was “electing to terminate [DSG] services under the Direct Board Fee Payment agreement.”
The company’s president was reportedly told that DSG was being cut off from payment processing services, specifically due to the company’s involvement with the firearm industry. DSG would officially be debanked on July 31, 2021. Paxton observed that “as a result of the termination of services, the company spent great time, expense and effort to find a payment processing service provider. This contributed to DSG’s eventual closing.”
Austin’s contract with WEX Bank has authorized up to $3.6 million in services, with over $2.2 million already reportedly spent. Paxton contends that neither the original contract nor any subsequent renewals include the provision required by SB 19 that contractors verify they do not discriminate against businesses connected to the firearms industry.
In his letter, the Attorney General carefully examines and dismisses any potential loopholes in the law. SB 19 provides two narrow exceptions: if the contractor is a sole-source provider or if no bidders can provide the required anti-discrimination clause. However, Paxton notes that “WEX Bank is not the only company that can meet the city’s fleet card services needs” and that Austin authorized the contract negotiation “without any open bidding or solicitation of other bids.”
Paxton notes that this legal battle largely deals with “debanking” – the practice of financial institutions rupturing ties with customers based on political or ideological grounds.
In his letter, he called attention to how “Banks and the regulatory regime took action during the Biden administration to cut off everyday Americans and their businesses from critical financial services because of their views. The concept of debanking is anti-American and stands in stark opposition to our rights to freedom of speech guaranteed by the Constitution.”
In recent years, the firearms industry has increasingly faced challenges accessing traditional banking services, with some major financial institutions such as Citigroup implementing policies that restrict business relationships with gun manufacturers and dealers. This corporate onslaught against the firearms industry has prompted several Republican-led states such as Alabama, Florida, Georgia, and Oklahoma to enact legislation similar to Texas’s FIND Act.
In a press release accompanying the letter, Paxton proclaimed: “In flagrant violation of its legal obligations, the City of Austin is sending millions of taxpayer dollars to companies that openly discriminate against the constitutionally protected firearms industry. The City of Austin does not get to pick and choose which laws it will follow, and I will take every measure to enforce Texas law.”
To fight corporate encroachments against gun rights, firearms trade associations like the National Shooting Sports Foundation (NSSF), have been actively supporting legislation like the FIND ACT across multiple states. Recent reports suggest that major banks, including JPMorgan Chase, Citigroup, and Wells Fargo, have been meeting with officials in Texas and Oklahoma to discuss their policies regarding firearms-related businesses.
Notably, Citigroup recently announced it would craft business decisions based on financial risk as opposed to “reputational risk,” a change that marks a significant departure from the anti-gun corporate measures they pursued during Donald Trump’s first term well into the administration of Joe Biden.
As the July 16 deadline looms on the horizon, Austin’s leaders must decide whether to amend their contract, fisk new vendors, or risk getting involved in a high-profile legal battle with the state.
About José Niño
José Niño is a freelance writer based in Austin, Texas. You can contact him via Facebook and X/Twitter. Subscribe to his Substack newsletter by visiting “Jose Nino Unfiltered” on Substack.com.
