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Huge: Major credit card companies halt rollout of codes for gun store purchases

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The merchant category codes demanded by gun control groups that were announced to great fanfare last fall are now in limbo after major credit card companies, including Visa and Mastercard, announced on Wednesday that they’re halting their rollout of the codes in response to a number of bills filed in red states that bar the use of the codes and promise fines for those credit card companies that use them.

The companies have never really been on board with the category code since the far-left Amalgamated Bank and gun control activists began lobbying for the International Standardization Organization to create one several years ago. The anti-gunners claim the code will help prevent mass shootings by requiring the companies to flag “suspicious transactions” at firearms retailers, but both Visa and Mastercard executives have said the codes don’t identify specific purchases, and the responsibility to flag any transactions deemed suspicious is more about reducing banking fraud and other financial crimes. At the very least, the legislation both companies referenced in today’s decision may have given the companies an easy out for a scheme they were never really on board with in the first place.

“There are bills advancing in several states related to the use of this new code,” a spokesman for Mastercard said in a statement Thursday. If passed, the proposals would create an “inconsistency” in how the code is applied by merchants and others, he said. “It’s for that reason that we have decided to pause work on the implementation of the firearms-specific MCC.”

Visa also took a pause because of the “significant confusion and legal uncertainty” the legislative proposals have created, according to a spokesperson.

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“MCCs are one data point that would not provide any insight on specific purchases or resolve larger issues,” the Mastercard spokesman said. “We are committed to working with policymakers and elected officials to contribute to constructive solutions that address the gun violence issue, while respecting important constitutional rights and protections for lawful activities.”

In addition to the announcement by Visa and Mastercard, Discover now says it will not be rolling out the use of the MCCs as it had previously announced just a few weeks ago. American Express is also “pausing” its implementation of the MCCs for the time being, so it does look like most major companies are in agreement.

As you can imagine, gun control groups are losing their minds over the decision. Here’s a taste of Brady’s press release on the announcement:

“It is shameful to hear that credit card companies Visa and Mastercard have caved to the gun lobby’s transparent political ploys. 

“If true, Visa and Mastercard are choosing political expediency over American lives. Make no mistake, Americans will continue to suffer and die as a result of this deadly decision. Having a dedicated process to flag troubling and suspicious firearms purchases, like they already do to detect other fraudulent purchases, is a common-sense strategy for companies to save lives and prevent the next mass shooting.

“We urge Visa and Mastercard to correct their course immediately. The choice they have now is clear: adopt this new tool at their disposal to prevent gun violence, or drag their feet while gun violence devastates our communities across the country. Every delay of action results in more lives needlessly taken.” 

Remember, the codes don’t identify specific purchases. Companies like Visa and Mastercard are supposed to determine if a purchase is suspicious based on the dollar amount and the frequency of any purchases at gun shops; an utterly impossible task, at least without generating an untold number of false flags.

However, it won’t just be gun control activists huffing and puffing. Look for California Gov. Gavin Newsom to respond in some form or fashion, and we’ll probably see other blue states introduce counter-legislation (at least where the legislative calendar permits it) that would penalize credit card companies that don’t implement the MCC’s for firearm retailers. Today’s news is a very welcome development for Second Amendment advocates, but I doubt it’s the end of the story.

Reuters frets over bills to block merchant codes for gun stores

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It’s been several months since the news broke about new merchant category codes specifically for gun stores and firearms retailers and so far none of the major credit card companies have actually started using them, though that looks to be changing soon. Discover will apparently be the first credit card firm to formally adopt the MCC for gun stores starting in April, which will likely cause many gun owners to stop using their Discover cards at FFLs (and likely elsewhere).

There have also been a number of bills filed in red-state legislatures this year that seek to block the new codes from being used; a development that Reuters frets is “undermining a tool welcomed by gun control advocates.”

The bills were introduced in states including Texas, Florida, Mississippi, Oklahoma, West Virginia and Wyoming. read more

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.

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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.

To be clear, the new merchant category code does not allow authorities to identify specific purchases, “only” the dollar amount spent at a particular location by a cardholder. But given that the supposed reason these codes were necessary in the first place was to track and identify suspicious transactions, critics are right to be concerned that the new codes will subject responsible gun owners to a draconian monitoring system that could easily generate false red flags for lawful purchases. The MCCs are really more designed to identify financial crimes, not gun trafficking or individuals plotting a mass shooting, but gun control activists are already trotting out their standard talking point that if you’re opposed to the new codes you must be just fine with violent crime.

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.

I guess the credit card companies themselves must be interested in protecting criminals, since most of them were opposed to the creation of the MCCs in the first place.

Skaggs’ eye-rolling analysis gets it completely backwards. When these codes do start being used, we probably will see many more customers start to pay cash as a result; not because of any legislation designed to thwart the use of the codes but because of the codes themselves.

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.

How often does that happen? Generally speaking, if a gun trafficker is using multiple gun shops in an attempt to illegally acquire firearms, they’re also using multiple straw buyers as well. And there’s nothing stopping any would-be gun trafficker from using cash to make their purchases, either now or in the future… though maybe we’ll start seeing anti-gun activists like Skaggs demand an end to cash-based transactions at firearm retailers once it’s become clear that these new merchant category codes aren’t thwarting criminals.

As for the bills that have gun control activists seeing red, it’s been a mixed bag in state legislatures so far. The Wyoming measure never made it out of committee, but the bills in Florida and Mississippi appear to have a better shot of becoming law this year. Between the legislative action and the response from consumers, I think these codes are in for a rocky rollout in the weeks ahead.

A Catch-22 for Massachusetts gun sellers?

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Massachusetts Gov. Maura Healey has been an anti-gun crusader throughout her time in public office, including her “reinterpretation” of the state’s ban on so-called assault weapons to encompass almost all semi-automatic long guns back when she was the state’s Attorney General; causing a run on modern sporting rifles in the short term and mass confusion over what exactly is an “assault weapon” under Massachusetts law ever since.

Healey’s latest edit is aimed at gun stores in the state, not directly at gun owners, but as Gun Owners Action League executive director Jim Wallace tells Bearing Arms’ Cam & Co, the governor’s recent announcement that the state will be providing new training for local law enforcement when they inspect FFLs is also sowing uncertainty.

As Wallace explains, the state law requiring annual inspections of local gun dealers is nothing new, but it’s been rarely and sporadically enforced since its enactment back in the 1980s. And despite Healey’s new directive on training local law enforcement on how to conduct the inspections, Wallace says under current law the state doesn’t really have a role to play.

For nearly a quarter of a century Massachusetts gun owners have struggled with many Local Licensing Authorities that make up their own rules when it comes to license application processes. During all this time, the State has consistently maintained that they have no control over the local authorities. The State further maintained that these were no State licenses (FID/LTC).

This is an interesting, convoluted stance since the firearm retailer licenses (Chapter 140, Section 122) are also issued by the Local Licensing Authorities. So, why suddenly does the State have the authority to train the local authorities on their legal obligations under this particular license?

Because Healey says so, that’s why. But Wallace says the issues with the governor’s directive go far beyond whether or not the state is overstepping its authority. While we haven’t seen the training standards yet, the Second Amendment advocate says the state appears to be asking the impossible of gun store owners.

Under Chapter 140, Section 123 the Local Licensing Authorities are required to conduct an annual inspection of all licensed retailers. The only authority they have under this law is: “…inspect, in a reasonable manner, such records and inventory for the purpose of enforcing the provisions of this section…” there are two clear problems here.

First, the State law clearly requires the Commonwealth to provide a “sales record book” to all licensed retailers. To date, no such books have ever been made available. It is the practice of the State to consider the records in the Massachusetts Instant Record Check System to act as the official books. That means there are no records to inspect on the retailer premises.

Second, there is no State law requiring retailers to keep a State inventory or report such inventory. To further complicate matters if the local authorities conduct such an inspection is that Federal Firearms Licensees (FFLs) (as we understand it) are allowed to keep inventory that can’t be transferred in the Commonwealth. So, what exactly will they be inspecting?

It’s a good question, but it also raises several others. Will some of those jurisdictions that have historically been hostile to the right to keep and bear arms use the convoluted language to try to shut down gun shops that don’t have a “sales record book” or track their inventory for the state, even though they’re not required by law? I wouldn’t be surprised to see it, especially since Healey is clearly hoping to add more red tape and regulations to firearm retailers.

Wallace says that GOAL is trying to get ahold of the actual training material and not just the governor’s talking points, so we’ll hopefully have some additional news to report on in the days ahead. Be sure to check out the entire conversation with Jim Wallace in the video window below, and stay tuned for any new developments as this training gets rolled out.

California bill takes on scourge of… gun store raffles?

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California Democrats are taking aim at gun stores across the state with a new bill that would not only make it a misdemeanor offense for FFLs to conduct raffles, but mandates that gun shops host “buyback” events as well.

The latest attempt to eradicate a culture of lawful gun ownership in the state is authored by Sen. Anthony Portantino, who says that SB 368 is meant to “put responsibility on these businesses to be better stewards of public health.” In reality, the legislation seems designed to dissuade people from visiting gun stores with a mind towards exercising their Second Amendment rights.

Portantino, who recently announced a bid for Congress, said new restrictions are particularly needed on promotional events that gun stores often run to bring in business.

“We don’t need games of chance to attract new people into the gun world,” Portantino said. “If it’s detrimental to public heath, should we really be giving freebies?”

Linda Bessin, founder of the political action committee Blue Values Burbank who has lobbied against the opening of new gun stores in the area, said banning promotional events would increase public safety and ensure California’s gun laws are closely followed.

“When you have a very family oriented community like Burbank, we’re going to do everything we can to protect the kids,” Bessin said.

Protect the kids from gun raffles they’re not old enough to enter in the first place? Or “protect” kids by making it harder for their parents to lawfully acquire a firearm and impart some actual gun safety education and training? Seems like it’s the latter to me.

Beyond the bill’s prohibition on raffles and giveaways, the legislation also mandates that gun stores store firearms for those who want to temporarily remove them from their homes, as well as requiring all FFLs to “establish and maintain a program to re-purchase firearms” in conjunction with California DOJ. Given that many gun shops already purchase old and pre-owned firearms for re-sale, this mandate appears to require gun stores to set up their own “buyback” program, with collected firearms being turned over to police rather than sold to customers.

Where would the money for these compensated confiscation efforts come from? Would FFLs be told to pay out of pocket, or would the state provide the money for gun stores to conduct these events? Portantino’s legislation is utterly silent on every salient detail, which I suspect is by design. Why bother getting bogged down in particulars when you can pass an open-ended mandate and let CalDOJ figure out how to implement it?

SB 368 is part of a glut of gun control legislation introduced in Sacramento, and isn’t even the only anti-2A bill introduced by Portantino this session. It remains to be seen whether this particular bill will advance, but it’s a guarantee that more infringements are coming from the anti-gun majority in Sacramento.

Their efforts are more than certain to prompt lawsuits by gun rights groups and 2nd Amendment advocates who’ve already warned lawmakers against passing new limitations on access to firearms. Republican lawmakers have argued that California’s strong gun control laws have still failed to prevent mass shootings and other incidents of gun violence, and that the state should instead focus its attention on illegal firearm ownership.

“Once again, Democrats are focused on the wrong problem. The local gun shop throwing in a free box of bird shot when you buy a shotgun isn’t what’s driving California’s crime wave,” said Assemblymember Tom Lackey, a Palmdale Republican and former California Highway Patrol officer. “If we want to get serious about gun crime, we have to get serious about gun criminals.”

Well, that’s not happening in the statehouse anytime soon. Democrats in Sacramento are deadly serious about curtailing and criminalizing the fundamental right to keep and bear arms, even as they shut down prisons and treat violent criminals with kid gloves. Their stated goal may be improving public safety, but the tactics they’re deploying are aimed at destruction of the Second Amendment and the eradication of a culture of lawful gun ownership.