California lawmakers consider bill requiring gun code use

The bill stands in contrast to legislation recently passed in Republican-led states that blocks use of the gun merchant category code

The merchant category code, which would identify purchases at gun and ammunition stores made with cards, has become a politically fraught issue for the card network companies. Spokespeople for Visa, Mastercard, American Express and Discover didn’t immediately respond to requests for comment. 

Following the code’s ISO approval last year, a group of 24 Republican attorneys general wrote a letter to card company CEOs, urging them not to use the code. Visa, Mastercard, Amex and Discover all backed off implementation of the gun MCC in March, with some citing state legislation taking aim at use of the code. All four companies have been quiet on the issue since. 

A handful of Republican-led states, including Florida, Montana and Mississippi, have passed legislation in recent months that would block use of the gun MCC.

The card companies’ March move prompted responses from Democratic U.S. Sens. Elizabeth Warren and Robert Menendez, as well as the Democratic attorneys general of 14 states, urging them resume work on implementing the code. Since then, legislation in some Republican-led states has been signed into law banning use of the code. 

As far as ISO is concerned, the code’s use is voluntary and left up to the users in the industry, a spokesperson for the organization has said. 

In an interview, Ting said the gun violence prevention nonprofit Brady Campaign approached him with the idea for the bill; a Brady spokesperson didn’t immediately respond to a request for comment. 

A California Senate Banking committee hearing on the bill is scheduled for July 5 at the Sacramento statehouse. The legislation hasn’t been scheduled for a hearing yet in the Assembly.

The legislation is “a common sense bill, where we could stop gun violence with just a simple code” by helping law enforcement identify suspicious gun and ammunition buying behavior, Ting said Wednesday. 

The legislation would give the state’s attorney general enforcement authority over the bill’s provisions. Civil penalties could amount to $10,000 for each violation. 

Credit card companies have asked for meetings with Ting, and his office is in the process of meeting with them, Ting said. The spokesperson declined to comment on which companies Ting is talking to regarding the bill.

“We are working thoughtfully and in good faith with financial institutions to ensure our bill can be implemented,” Ting’s spokesperson said in an email.

In Montana, legislation taking aim at the gun MCC was signed by Gov. Greg Gianforte in May. “Major credit card companies rightly abandoned the foolish idea of imposing a specific merchant code on firearms and ammunition retailers because the measure will allow invasions of consumer privacy without improving public safety,” said Republican Montana Attorney General Austin Knudsen in a statement Wednesday in response to an inquiry.

If California passes the proposed legislation, Adam Skaggs, chief counsel and vice president of the Giffords Law Center to Prevent Gun Violence, expects a handful of other blue states may attempt to do the same.

Card companies “will then either have to figure out how to have a patchwork approach to this,” or conflicting state approaches could lead to a situation “where a federal solution just becomes necessary,” he said. “There will be increasing pressure on Congress, on federal financial regulators to step in.”

By Caitlin Mullen on June 29, 2023
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