House bill would prevent credit card tracking of firearms sales

The West Virginia Legislature is getting a step ahead of a move some credit card companies have been making relating to separate merchant codes for firearm sales.

House Bill 2004 passed 95-0 Friday and was sent to the Senate.

The bill, called the Second Amendment Financial Privacy Act, would “prevent the use of payment card processing systems for surveillance of Second Amendment activity and discriminatory conduct.”

Sen. Shelley Moore Capito, R-W.Va., raised concern about the merchant codes in September 2022 and sent a letter to Visa, Mastercard and American Express asking why the decision was made and what the purpose is.

“I write to express my apprehension regarding the decision to implement new, separate, merchant category codes (MCCs) for firearms sales under the International Organization for Standardizations (ISO) guidelines,” she said in the letter. “I am concerned that these efforts will undermine the ability of lawful Americans to exercise their constitutional Second Amendment rights, and seek reassurance that you will not participate in activist efforts to impede free exercise of these rights.”

Capito said the move is a “worrying signal to legal sellers and buyers of firearms that their purchases can be monitored, disclosed, or even prevented from occurring.”

“This prompts serious constitutional concerns, and sets a troubling precedent wherein gun owners can be impeded in their free exercise of constitutional rights through fear of reprisal, or even the threat of their privacy being invaded,” she said. “Visa, Mastercard, and American Express are under no legal obligation to implement this new MCC and I urge you to change course immediately.”

The ISO’s internal committee (Registration and Maintenance Management Group (RMMG)) approved the creation of a new MCC for gun retailers on September 9, 2022, Capito said. This decision was made at the request of Amalgamated Bank, a financial institution who proudly and publicly supports “progressive causes” and engages in discriminatory lending practices. Amalgamated Bank’s request and appeal were previously denied by the ISO in 2021.

West Virginia Attorney General Patrick Morrisey also questioned the move and joined a coalition of AGs from 24 states opposing the decision.

“Categorizing the constitutionally protected right to purchase firearms unfairly singles out law-abiding merchants and consumers alike,” a letter sent by the coalition said. “Efforts to track and monitor sales at gun stores would only result in vague and misleading information. This categorization would not recognize the difference, for example, between the purchase of a gun safe and a firearm. Nor would it capture firearm purchases made at department stores, resulting in arbitrarily disparate treatment of ‘gun store’ merchants and consumers … Social policy should be debated and determined within our political institutions. Americans are tired of seeing corporate leverage used to advance political goals that cannot muster basic democratic support.”

If HB 2004 passes, a financial institution “may not disclose financial records and a state or local government entity may not compel disclosure of financial records in a manner that singles out or discriminates against any person based on activity protected by the Second Amendment to the United States Constitution or Section 22, Article III of the West Virginia Constitution.”

Customers also would have legal recourse if that is violated and “may bring a civil action for damages against any financial institution or government entity that causes the customer’s protected financial information to be disclosed in violation of this article.”