Analysis: US Republicans aim to stymie gun sale codes at state level

Amalgamated Financial

03/03/2023 11:00

By Ross Kerber
       March 3 (Reuters) - Legislation being pursued by
Republicans in several U.S. states aims to limit use of a
planned merchant code for credit card transactions at gun
retailers meant to detect suspicious firearms and ammunition
sales, undermining a tool welcomed by gun control advocates.
    The bills were introduced in states including Texas,
Florida, Mississippi, Oklahoma, West Virginia and Wyoming.
 urn:newsml:reuters.com:*:nL1N35A1XM
    They would prohibit or limit banks or payment processors
from using the "merchant category code," or MCC, approved for
gun sellers in September by the Geneva-based non-governmental
International Organization for Standardization (ISO), which
develops standards on various aspects of technology and
manufacturing. 
    The major credit and debit card companies have committed to
using the code. Discover Financial Services  DFS.N  has said it
will introduce it in April and that it is following other
companies in doing so. Discover is the first company to publicly
state a timetable. 
    The code was requested from the ISO by Amalgamated Bank
 AMAL.O  of New York, which calls itself a socially responsible
lender and investor.
    The state proposals mark the latest flashpoint for U.S.
Republicans in their attack on the growing corporate
consideration of environmental, social and governance (ESG)
factors - what some conservatives deride as "woke capitalism."
    The Republican state lawmakers sponsoring the bills have
said they want to prevent the code from being used to infringe
upon gun rights enshrined in the U.S. Constitution's Second
Amendment.
    Jansen Owen, a state representative who is the author of
legislation in Mississippi, said that as a conservative he
worries that the code among other things could be used to track
lawful ammunition purchases.
    "I don't want card companies to raise interest rates or fees
on merchants as a way to dissuade them" from selling guns and
ammunition, Owen told Reuters.
    "This MCC would lead to the creation of a backdoor registry"
of gun purchases in violation of state law in Florida, state
Senator Danny Burgess told a February hearing on legislation he
has authored.
    
    'UNINTENDED CONSEQUENCES'
    Some trade groups representing banks have expressed concern
that the state measures could create problems such as exposing
only certain financial companies to enforcement or making it
harder for consumers to use credit cards across state lines.
Some said they do not oppose the bills but worry about possible
repercussions. 
    "We're working toward a solution that gets what the sponsors
want to do and makes sure there's no unintended consequences,"
said Anthony DiMarco, head of government affairs for the Florida
Bankers Association, whose members include top Wall Street
lenders such as JPMorgan Chase & Co  JPM.N  and Wells Fargo &
Co. WFC.N 
    Wyoming's proposed "Second Amendment financial privacy" bill
stalled last month. Scott Meier, president of the Wyoming
Bankers Association, said there was concern among legislators
about whether the proposal could expose local banks to penalties
even though they had little say on how payment networks and
processors adopt the code.
    "Banks don't set these codes," Meier said.
    Some Democrats and gun-control advocates have voiced concern
that the bills could reduce the effectiveness of the code for
spotting worrisome purchases. They have cited instances in which
people who carried out mass shootings bought weapons on credit.
    Proponents of the code have said it will enable financial
institutions to better assist law enforcement authorities in
investigating crimes involving gun violence.
    Adam Skaggs, chief counsel for the gun safety group Giffords
Law Center to Prevent Gun Violence, expressed opposition to the
Republican proposals.
    "The only thing they're protecting is the rights of criminal
gun purchasers," Skaggs said of the legislation.
    Skaggs also said the legislation could lead to unpredictable
consequences like driving gun retailers to become cash-only
businesses. 
    "We're wading into uncharted waters here," Skaggs said.
    The new code will not show specific items purchased but will
identify where a person shopped by adding gun stores to a list
of hundreds of existing retail categories including snowmobile
dealers and wig shops. 
    Peter Pope, a special counsel to Manhattan District Attorney
Alvin Bragg, said the codes would allow banks to flag suspicious
purchases, for example when people buy a single gun from
multiple stores in order to avoid required forms for multiple
purchases - just as banks already flag other transactions.
    "If the banks could raise their hand when they see
indicators of moving money around for narcotics, then they could
raise their hand for gun trafficking," Pope said.
    Visa Inc  V.N  declined to comment on the state bills. Other
payment card companies Discover, Mastercard Inc and  MA.N 
American Express Co  AXP.N  did not respond to requests for
comment. 
    A JPMorgan representative declined to comment. Wells Fargo
did not immediately provide comment. 
    Owen, the Mississippi state legislator, said he expects that
payment companies could address any technical issues the bills
could create.
    "I think the credit card companies are going to have to
adapt on a state-by-state basis," Owen said. 
    

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Biden signs gun safety bill into law, takes swipe at Supreme
Court     urn:newsml:reuters.com:*:nL1N2YC09A
U.S. Supreme Court expands gun rights, strikes down New York law
    urn:newsml:reuters.com:*:nL1N2YA1GY
U.S. Supreme Court throws out rulings upholding gun restrictions
    urn:newsml:reuters.com:*:nL1N2YH20U
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Ross Kerber in Boston; Editing by Will Dunham and
Simon Jessop)
 ((ross.kerber@thomsonreuters.com; (617) 412 0093;))