An international panel that sets standards for credit card processors has approved a new code to be used exclusively for firearm and ammunition purchases.
The Switzerland-based International Organization for Standardization (ISO) approved a merchant category code (MCC) for gun retailers, which will allow banks and credit card companies to flag transactions.
MCCs are four-digit codes that classify businesses by the type of goods or services they provide. Banks and card issuers “can use MCCs to categorize, track and restrict transactions” and may be used to gather “information about cardholder purchasing behavior,” according to Citibank.
The new code follows a lobbying campaign by New York City and state officials, the California teachers’ pension fund, and Amalgamated Bank, which prides itself on being “socially responsible.”
Amalgamated Bank calls the code a central tool financial institutions must now use to detect and report suspicious activity associated with gun trafficking and mass shootings.
“We all have to do our part to stop gun violence,” said Priscilla Sims Brown, President and CEO of Amalgamated Bank. “And it sometimes starts with illegal purchases of guns and ammunition. The new code will allow us to fully comply with our duty to report suspicious activity and illegal gun sales to authorities without blocking or impeding legal gun sales.”
She added, “This action answers the call of millions of Americans who want safety from gun violence and we are proud to have led the broad coalition of advocates, shareholders, and elected officials that achieved this historic outcome.”
Currently, merchants and credit card companies include gun retailers with other types of sellers, such as miscellaneous retail or sporting goods. The new code would specifically identify all gun and ammunitions sellers and buyers exclusively.
Banks already file suspicious activity reports (SAR Reports) with the U.S. Treasury’s Financial Crimes Enforcement Network for transactions that may indicate criminal activity.
So far, no one has specified how under the new MCC system “suspicious activity” will be defined for the purposes of determining illegal activity and notifying law enforcement after a firearm or ammunition is purchased and flagged.
Stephen Gutowski, firearms reporter and gun safety instructor, asked on Twitter, “How is a merchant code going to help anyone determine if a sale at a gun store was illegal? This is the activist bank that requested the code, & even they don’t seem to have a real plan for it.”
This quote from Amalgamated Bank's CEO makes no sense at all. How is a merchant code going to help anyone determine if a sale at a gun store was illegal? This is the activist bank that requested the code, & even they don't seem to have a real plan for it. https://t.co/FdItAfjGiJ pic.twitter.com/kk9riDtXdk
— Stephen Gutowski (@StephenGutowski) September 9, 2022
The new code will allow banks and credit card companies to flag large purchases, although those types of transactions are legal. It will also allow financial institutions to identify any individual who purchases a firearm, effectively creating a de facto gun registry.
“Everyone has a role to play in the fight against gun violence. The creation of new merchant category code for firearms is a major step forward that will help give law enforcement the tools they need to stop a tragedy before it happens,” said New York Gov. Kathy Hochul. “I’m grateful to the business leaders who stepped up and joined the fight to protect public safety — here in New York and across the nation. Together we can stop gun trafficking and keep New Yorkers safe,”
