14 States' Attorneys General Condemn Credit Card Giants for Backing Out of Gun Sales Merchant Code

New Jersey's Attorney General Matthew J. Platkin has led a coalition of attorneys general from 14 states in condemning Visa, American Express, Mastercard, and Discover for backing out of their commitment to implement a new merchant code for gun sales.

The creation of the new code was approved earlier this year by the Switzerland-based International Organization for Standardization to allow financial institutions to better detect and report suspicious activities related to the purchase of firearms and ammunition at standalone gun retail stores. Visa, American Express, and Mastercard publicly announced plans to add the new code in September 2022, with Discover following suit in February 2023.

But last week, all four companies announced they were putting the brakes on implementing the code, citing legislative bills in several states seeking to bar or limit the use of the voluntary code as a supposed incursion on Second Amendment rights.

In response, the attorneys general wrote a letter to the chief executives of the credit card companies, accusing them of succumbing to political pressure and cloaking it in specious legal arguments and amorphous veiled threats from certain state attorneys general. The attorneys general stated that applying the merchant code is not an invitation to violate the Second Amendment. Instead, failing to apply it is an invitation to criminals to purchase firearm products with impunity and commit violent acts in communities.

The newly created code for gun stores is hardly an extraordinary development as credit card companies already use codes to categorize basic transactions for everyday items like flowers and groceries. Additionally, they have hundreds of retailer codes for everything from stamp shops and wig stores to car rental agencies and various government services. The new code simply creates a unique merchant category for gun stores, which previously were categorized as “sporting goods stores” or “general merchandise.”

The new code, narrowly tailored so that it applies only to purchases made at independently-owned gun retail shops, will have no bearing on an individual’s ability to lawfully purchase firearms. It will, however, help financial institutions and law enforcement agencies identify individuals engaging in unlawful transactions, including the purchase of prohibited firearms such as ghost guns or assault weapons; straw buyers engaged in trafficking; and high-risk purchasers trying to avoid detection in amassing an arsenal that could be used for mass shootings.

Enabling financial institutions to detect and flag threatening patterns and potential criminal activity for law enforcement is nothing new, as they’ve been doing it for decades. Federal law requires Suspicious Activity Reports when banks “detect a known or suspected violation of Federal law or a suspicious transaction related to a money laundering activity or a violation of the Bank Secrecy Act.” And state and federal law enforcement agencies often request evidence relating to firearms or other investigations. But the ability of financial institutions or law enforcement to take steps against criminal gun purchases is hampered by the lack of a dedicated code for firearm and ammunition retailers.

Last fall, Attorney General Platkin had joined forces with his colleagues from across the country to call for the implementation of the new merchant code for gun sales, citing the urgent need to address gun violence in America. With the recent decision by Visa, American Express, Mastercard, and Discover to abandon their commitment to the new code, the attorneys general are now urging the credit card companies to reconsider their position and fulfill their obligation to help prevent mass shootings and curb gun violence.

In their letter to the credit card companies, the attorneys general made it clear that the new merchant code is not an attack on the Second Amendment, but rather a common-sense measure to protect public safety. They emphasized that financial institutions have a vital role to play in preventing gun violence and these credit card companies have a responsibility to uphold their commitment to implement the new code.

The attorneys general concluded their letter by urging the credit card companies to stand up to political pressure and to prioritize public safety over special interests. They emphasized that the implementation of the new merchant code for gun sales is a crucial step toward reducing gun violence in America and protecting the lives of innocent people.

“We hope and expect you will reconsider your decision and not abandon your public commitments. Should you fail to do so, your complicity with ongoing needless gun tragedies will lead us to consider further actions.” – Attorneys General Multi-State Letter to American Express, Mastercard, Visa, & Discover

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