Republican efforts to prevent the use of a financial tracking code for firearm retailers have expanded.
Over the weekend, Texas Governor Gregg Abbott (R.) signed House Bill 2837. The law prohibits transactions at firearm retailers from being tracked with a specialized Merchant Category Code (MCC). Texas joins Montana, North Dakota, Idaho, West Virginia, Mississippi, and Florida in passing laws to ban the use of the specialized codes.
The move makes Texas the biggest state to implement restrictions on the use of MCCs. It also represents a victory for gun-rights advocates and gun industry members who have been pushing back against the idea of trying to track, and potentially flag, certain kinds of gun purchases.
The National Shooting Sports Foundation, the gun industry’s trade group, praised Abbott for signing the law.
“Americans exercising their right to legally purchase firearms, ammunition and other related accessories should never be concerned that their lawful and everyday purchases could be used against them by private financial service providers or government authorities simply for exercising their Second Amendment rights,” Larry Keane, the group’s general counsel, said in a statement. “The firearm retailer MCC was suspiciously created to do just that and to track names and financial data by including it in a government-accessible watchlist. Gov. Abbott put the Second Amendment barricades up for Texas gun owners by signing this critical legislation into law.”
MCCs are commonly used by credit card companies to classify all sorts of transactions, often as a means to offer incentives for different kinds of purchases. But gun-rights advocates argue the codes could be used to track gun sales and identify suspicious buying patterns, which could then be passed along to law enforcement.
A 2018 New York Times report detailing some mass shooters’ tendencies to purchase guns with credit cards ignited the debate over gun-store-specific MCCs. The report argued implementing a unique code for firearm retailers would make it easier to flag potential mass shooters.
Firearm retailers are often categorized under a general sporting goods MCC. Although, even if a specific MCC were implemented for them, the code wouldn’t give credit card companies insight into what was bought at a gun store.
Regardless, Amalgamated Bank, which has deep ties to gun-control activists and other liberal interest groups, proposed the creation of such an MCC 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 the ISO officially approved it.
Gun-rights advocates condemned the plan. They argued the code would be unable to prevent mass shootings, gun owners would be unfairly tracked, and firearm retailers would be harmed.
Just days after the announcement by the credit card companies, 12 Republican attorneys general sent a letter to leading credit card companies addressing concerns over the code.
“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 March, Visa, Mastercard, and Discover announced they were suspending plans to adopt the MCC, citing the legislation prohibiting gun-store-specific codes.
“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.”
However, the fight over the codes isn’t over. In response to the credit card companies’ decision, fourteen Democratic senators wrote a letter of their own to the Department of the 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.”
Governor Abbott also signed HB 3137 over the weekend, barring local municipalities and counties from forcing gun owners to obtain liability insurance.