Now playing
01:34
Why Wayfair employees are walking out of work
Now playing
04:56
How these startups are tackling high drug costs in the US
WASHINGTON, DC - MARCH 09: Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and Exhibition March 9, 2020 in Washington, DC. Musk answered a range of questions relating to SpaceX projects during his appearance at the conference. (Photo by Win McNamee/Getty Images)
Win McNamee/Getty Images
WASHINGTON, DC - MARCH 09: Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and Exhibition March 9, 2020 in Washington, DC. Musk answered a range of questions relating to SpaceX projects during his appearance at the conference. (Photo by Win McNamee/Getty Images)
Now playing
04:19
Bitcoin and crypto's 'Elon Musk problem'
Now playing
02:29
'Outrageous' used car prices amid highest inflation in 13 years
jeff bezos blue origin space launch cooper intv sot vpx_00021804.png
jeff bezos blue origin space launch cooper intv sot vpx_00021804.png
Now playing
03:05
Jeff Bezos reveals most surprising part of space mission
CNN
Now playing
03:05
These moms explain how child tax credit checks will help them
CNN/John General/Atom Smasher
Now playing
04:04
Here's everything you need to know about ransomware
Now playing
04:04
Subway CEO on menu changes: The one thing we did not touch is our tuna
Now playing
02:40
Gretchen Carlson tells Anderson about the bipartisan bill she's backing to help workers
Rachael Flores
Now playing
02:22
Employees go viral after resigning via Burger King sign
Virgin Galactic
Now playing
02:05
Richard Branson lands safely after rocketing to outer space
CNN/Shutterstock
Now playing
02:20
Prices are going up on almost everything. Here's why
A car drives by a Speedway gas station next to the Shell refinery on March 03, 2021 in Martinez, California. Gas prices have increased across the United States to a national average of $2.72 per gallon, an increase of 30 cents from one month ago. Gas in California has an average price of $3.68 per gallon, the highest in the nation.  (Photo by Justin Sullivan/Getty Images)
Justin Sullivan/Getty Images
A car drives by a Speedway gas station next to the Shell refinery on March 03, 2021 in Martinez, California. Gas prices have increased across the United States to a national average of $2.72 per gallon, an increase of 30 cents from one month ago. Gas in California has an average price of $3.68 per gallon, the highest in the nation. (Photo by Justin Sullivan/Getty Images)
Now playing
04:01
Gas prices are high. Here's why
Now playing
02:46
The US needs construction workers
BetterUp CEO Alexi Robichaux workplace mental health orig_00023111.png
BetterUp CEO Alexi Robichaux workplace mental health orig_00023111.png
Now playing
03:06
This CEO says leaders need to focus on mental health to boost productivity at work
A driver uses the Didi Chuxing ride-hailing app on his smartphone while driving along the street in Beijing on July 2, 2021. (Photo by Jade GAO / AFP) (Photo by JADE GAO/AFP via Getty Images)
Jade Gao/AFP/Getty Images
A driver uses the Didi Chuxing ride-hailing app on his smartphone while driving along the street in Beijing on July 2, 2021. (Photo by Jade GAO / AFP) (Photo by JADE GAO/AFP via Getty Images)
Now playing
02:13
Didi shares plummet after China bans it from app stores
New York CNN Business —  

Bank of America is the latest big financial services company to end its business relationships with owners of immigrant detention centers on the border between the United States and Mexico. It’s not alone.

Several companies, including publicly traded prison owners CoreCivic (CXW) and GEO Group (GEO), have come under fire for their work with the federal government, particularly because of reports of poor treatment of immigrants held at the companies’ detention facilities. Democratic presidential candidate Senator Elizabeth Warren has called for private prisons to be banned.

Wall Street — and Corporate America in general — is nervous about the perception that it is doing business with prison operators who have reportedly engaged in controversial practices, particularly regarding the treatment of migrant children. Companies often face customer and investor scrutiny when they do business with entities that fall out of public favor.

Reducing exposure to prisons

JPMorgan Chase (JPM) announced in March it was cutting ties with the corrections facilities industry.

“JPMorgan Chase has a robust and well established process to evaluate the sectors that we serve,” the company said in a statement. “As part of this process, we will no longer bank the private prison industry.”

Scandal-ridden Wells Fargo (WFC) also disclosed earlier this year that it’s paring back its relationships with prison companies.

“Our credit exposure to private prison companies has significantly decreased and is expected to continue to decline, and we are not actively marketing to that sector,” Wells Fargo said in a business standards report released in January.

Employees at online furniture retailer Wayfair (W) have been protesting the company’s sales to a government contractor that runs a detention center. Wayfair (W) responded by announcing a $100,000 donation to the American Red Cross.

It remains to be seen if big investment firms also look to distance themselves from the prison industry, similar to what iShares owner BlackRock (BLK) and several other fund managers did with gun stocks American Outdoor Brands (AOBC) (formerly Smith & Wesson) and Sturm Ruger (RGR) in the wake of a series of mass shootings in America during the past few years.

Vanguard and iShares are the two largest holders of CoreCivic and GEO. Both stocks are held mainly in passive index funds that mimic indexes such as the S&P Mid Cap 400 and Russell 2000, as opposed to actively managed funds that are choosing to buy the stocks based on the merits of the companies.

“The immigration crisis at the border is deeply saddening, and this troubling issue needs to be solved by our elected officials,” Vanguard said in a statement. “We hope that policymakers come to a swift resolution to ensure the safety and security of these children and individuals.”

Vanguard noted the prison stocks make up a “very modest” portion of the company’s portfolios, and it said eliminating all controversial stocks would be impractical.

“We believe it would be exceedingly difficult to manage our funds effectively and efficiently while seeking to address the many social, political, and environmental concerns of our 20 million clients and the broader global community,” the company said.

BlackRock/iShares did not respond to a comment about whether it would look to exclude the two companies from index mutual funds and ETFs. But both firms also run so-called socially responsible funds that do not own the stocks. For example, iShares has an ETF called the MSCI KLD 400 Social (DSI) fund which does not hold GEO and CoreCivic.

Prison operators respond

The prison companies are unhappy about the recent decision made by Bank of America.

CoreCivic said in a statement on its website Monday that what it called “politicized banking decisions” send “a terrible message to others in the private sector who are working to help our government solve serious problems in ways it could not do alone.”

“No other company has so vocally declared public support for policies at all levels of government to tackle America’s recidivism crisis,” CoreCivic added, also saying that Bank of America “has misrepresented who we are and misrepresented the conclusions of a process in which we voluntarily engaged.”

GEO also released a statement about the Bank of America decision.

“For over thirty years, we have provided high-quality services to the federal government under both Democrat and Republican administrations,” GEO CEO George Zoley said Wednesday. “To be clear, The GEO Group has never managed any facilities that house unaccompanied minors, nor have we ever managed border patrol holding facilities.”

Zoley added that the centers GEO runs for the US Immigration and Customs Enforcement division “are not overcrowded and comply with performance-based standards, which were first established under President Barack Obama’s administration.”

Shares of GEO and CoreCivic have been under immense pressure as of late due to this scrutiny. Each stock has plunged more than 10% in the past month.