Republicans continue to fight against the introduction of a financial tracking code for firearm retailers.
On May 19th, Montana Governor Greg Gianforte (R.) signed Senate Bill 359, which blocks transactions at firearm retailers from being flagged with a Merchant Category Code (MCC). Gianforte signed the law less than a month after North Dakota Governor Doug Burgum (R.) signed a version in his state. Montana and North Dakota join Idaho, West Virginia, Mississippi, and Florida in passing laws to bar the use of specialized MCC codes for gun stores.
The laws represent continuing momentum in the firearms industry’s pushback against gun-control advocates’ efforts to enlist the financial industry in their work to restrict gun sales. The National Shooting Sports Foundation (NSSF), an industry trade group, said “gun owners should worry about what’s in their wallet, not who’s in their wallet” and the collection of new financial regulations accomplish that goal.
“North Dakotans legally purchasing firearms and ammunition should never be threatened by private financial service providers or government authorities by having their name and financial data being added to a government-accessible watchlist simply for exercising their Second Amendment rights.” Lawrence G. Keane, NSSF general counsel, said in a press release. “Governor Burgum is ensuring North Dakotans won’t be held captive by the radical ‘woke’ antigun agenda that seeks to weaponize credit cards in gun owners’ wallets against them.”
The newly passed laws are the latest action in the battle over MCCs, which track purchases at different categories of retailers. There are thousands of codes already in use across every industry, and they are often used by credit card companies to offer incentives based on what kind of purchases a customer makes. But they can also be used to flag buying patterns and report them to law enforcement if a credit card company believes the purchases indicate a customer may be breaking the law.
The fight over a gun-store-specific MCC code began with a 2018 New York Times report detailing how some mass shooters had used credit cards to buy their guns. That report suggested financial transactions for guns could be tracked if a unique MCC was introduced for firearms retailers, which currently operate under a more general sporting goods MCC, and “suspicious” buying patterns could be flagged for law enforcement–even though MCC codes do not provide insight into what was specifically purchased at a retailer. Amalgamated Bank, which has deep ties to gun-control activists and other liberal interest groups, proposed the creation of such an MCC code to the International Organization for Standardization (ISO). The organization approved the idea in September 2022 after initially denying the request.
Visa, Mastercard, and Discover announced they would put the new code into effect shortly after it was officially approved by the ISO.
Gun-rights advocates and industry members decried the plan. They argued it would track gun owners and harm firearms retailers rather than prevent mass shootings.
Just days after the credit card companies announced they would adopt the MCC, Tennessee Attorney General Jonathan Skrmetti (R.) and Montana Attorney General Austin Knudsen (R.) wrote a letter signed by ten other Republican attorneys general to leading credit card companies addressing their concerns over the code. They argued it should not be adopted.
“As Attorneys General, we have the privilege of protecting our citizens from corporate coordination that hurts consumers,” the letter reads. “We are also charged with ensuring that consumer data is not unlawfully gathered or used. That is why we have serious concerns about the implementation of this Merchant Category Code.”
In early March, Visa, Mastercard, and Discover announced they were “pausing” implementing an MCC at firearm retailers.
“Visa’s mission is to facilitate secure and reliable global commerce in compliance with applicable laws,” Julia Thompson, a Visa spokesperson, told The Reload in March. “Multiple U.S. states are considering legislation to prohibit or restrict the use of the new merchant category code (MCC) for gun and ammunition stores. There is now significant confusion and legal uncertainty in the payments ecosystem, and the state actions disrupt the intent of global standards. Accordingly, Visa is pausing implementation of the MCC.”
Their implementation of MCCs remains suspended.
Advocates for the new code have not given up, though. In response to the suspension, fourteen Democrat senators wrote a letter of their own addressed to the Department of Treasury and the Department of Justice.
“Financial firms are already obligated to report suspicious transactions connected with a range of illegal activities,” the letter reads. “Implementation of the new MCC code could provide banks with key insight to identify suspicious patterns of firearm and ammunition purchases, which could potentially help law enforcement preempt mass shootings.”
Similar bans on the use of a gun-store-specific MCC code have been introduced in Texas, Oklahoma, and Wyoming, according to Reuters.