Without the backing of big banks, private prison stock prices plummet
Bank of America announced on Wednesday that it would no longer finance facilities at private prisons, sending shares of 2 of the largest private prison companies — GEO Group and CoreCivic — down 4.2% and 4.4%, respectively.
But this wasn’t the first big bank to bail on private prisons…
In fact, it was the last.
Wells Fargo and JPMorgan both announced that they would no longer finance private prisons, leaving Bank of America as the last of America’s 6 big banks with money wrapped up behind bars.
Like the other 2 banks that pulled the plug on profit-producing prisons, Bank of America’s choice was a response to public pressure.
“The private sector is attempting to respond to public policy and government needs and demands in the absence of long-standing and widely recognized reforms needed in criminal justice and immigration policies,” Bank of America toldThe Washington Post.
Now, the future of for-profit prisons is uncertain
Despite their recent stock slumps, GEO Group’s stock is still up 3% on the year, and CoreCivic’s is up 14% on the year.
But, since pressure from politicians and the public is likely to continue for private prisons, their access to loans and credit could dry up if banks continue to bail.