Democratic Senators Push Regulators to Support Merchant Gun Code

March 15, 2023

Sens. Bob Menendez (D-NJ) and Elizabeth Warren (D-MA) on Wednesday urged federal regulators to issue guidance to speed adopting a new merchant category code that identifies gun and ammo sales.

Warren has been behind the effort for months to get the major credit card companies to adopt a specific merchant category code, which identifies the type of item purchased with that card for firearms and ammunition, rather than what pops up currently—usually “sporting goods” or “retail.”

In September, the International Standards Organization (ISO) in Geneva, Switzerland, which sets merchant coding standards, approved the new gun-specific code.

In a letter this week, the two Senators and other Democrats called on Treasury Secretary Janet Yellen and Attorney General Merrick Garland to “quickly publish any policy advisory, enforcement guidance, and other materials needed by financial institutions, retailers, and law enforcement” as the new merchant code is implemented for gun and ammunition stores.

Last month, Discover card’s company said it would implement the new code starting in April. However, the three other major card companies—Visa, American Express and Mastercard—all said last Thursday that they were suspending their plans to implement the code.

The card companies’ suspension comes amid a push by 24 Republican-led states to bar or limit the voluntary merchant code after some Republican politicians argued the code could violate the privacy of citizens lawfully buying guns. 

It also comes after Rep. Barry Moore (R-AL) has been pushing to adopt a bill that would designate the AR-15 as America’s “national gun.”

Following last year’s mass shooting at Robb Elementary School in Uvalde, Texas in which 21 were killed including 19 children, CBS’s 60 Minutes named the AR-15 “the weapon of choice of the worst mass murderers.” Nine states, both red and purple, have an official state gun—Alaska, Arizona, Indiana, Kentucky, Pennsylvania, Tennessee, Texas, Utah, and West Virginia—though none are the AR-15.

President Biden, meanwhile, signed an executive order Tuesday to reinforce background checks for gun buyers.

The new merchant category code adopted by Discover will not show specific items purchased or allow banks to track specific purchases, nor did the now-suspended codes of Visa or Mastercard.

The gun-specific code was first requested by Amalgamated Bank of New York. In a statement, the bank’s CEO Priscilla Sims Brown said the codes would allow financial institutions to use new tools to detect and report suspicious activity associated with gun trafficking and mass shootings, without impeding legal gun sales.

She added, “This action answers the call of millions of Americans who want safety from gun violence.”

The credit card companies appear to be looking to strike balance. In September a Mastercard spokesperson said following the ISO’s approval, “We now turn our focus to how it will be implemented by merchants and their banks as we continue to support lawful purchases on our network while protecting the privacy and decisions of individual cardholders.”

While an American Express statement said at the time, “We are focused on ensuring that we have the right controls in place to meet our regulatory and fiduciary responsibilities, as well as prevent illegal activity on our network.”

On Thursday Montana Attorney General Austin Knudsen, who led the 24-state Republican group, said in a statement that the credit card companies who postponed adopting the gun-specific code “came to the right conclusion.” He added that the credit card companies should not simply “pause” the implementation of the code, “they should end it definitively.”

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