MONTGOMERY, Ala. (March 27, 2023) – A bill filed in the Alabama House would prohibit financial institutions from tracking or disclosing firearm-related transactions, undermining efforts by the feds to collect data on legal gun owners.

Rep. Mack Butler (R) introduced House Bill 181 (HB181) on March 22. Titled the “Second Amendment Financial Privacy Act,” the legislation would prohibit a financial institution operating in Alabama from disclosing a customer’s “protected financial information” unless the data is “not singled out, segregated, or disclosed based on the assignment of a firearms code.”

It is the intent of the Legislature to prohibit the misuse of payment card processing systems to surveil, report, or otherwise discourage constitutionally protected firearm and ammunition purchases within Alabama’s jurisdiction.

A financial institution can only disclose “protected financial information” if they get written authorization from the customer or if a court-issued subpoena requires disclosure.

Protected financial information is defined as “any record of a sale, purchase, return, or refund involving a payment card which is retrieved, characterized, generated, labeled, sorted, or grouped based on the assignment of a firearms code.”

The legislation also authorizes the State Department of Finance to disqualify financial institutions from any competitive bidding processes for state contracts if they’re found to be in violation of the law. A violation also includes a civil penalty.

HB181 explains the background for this bill in the legislative findings.

In September of 2022, the world’s three largest payment card networks publicly announced they would assign a unique merchant category code to firearms retailers accepting payment cards for purchases, after 28 members of Congress sent a public letter to the networks, pressuring them to adopt the new code. In the letter to payment card networks, federal lawmakers stated that the new merchant category code for firearms retailers would be “…the first step towards facilitating the collection of valuable financial data that could help law enforcement in countering the financing of terrorism efforts,” expressing a clear government expectation that networks will utilize the new Merchant Category Code to conduct mass surveillance of constitutionally protected firearms and ammunition purchases in cooperation with law enforcement.


Concern about the misuse of firearms databases isn’t just paranoia. The Taliban has reportedly used a firearm ownership database created by the U.S. government to track down gun owners and confiscate firearms in Afghanistan. This goes to show that even if you trust the people creating the database, it can fall into the wrong hands. In other words, the very existence of a database is a danger.

The feds can share and tap into vast amounts of information gathered at the state and local level through fusion centers and a system known as the “information sharing environment” or ISE.

Fusion centers were sold as a tool to combat terrorism, but that is not how they are being used. The ACLU pointed to a bipartisan congressional report to demonstrate the true nature of government fusion centers: “They haven’t contributed anything meaningful to counterterrorism efforts. Instead, they have largely served as police surveillance and information sharing nodes for law enforcement efforts targeting the frequent subjects of police attention: Black and brown people, immigrants, dissidents, and the poor.”

Fusion centers operate within the broader ISE. According to its website, the ISE “provides analysts, operators, and investigators with information needed to enhance national security. These analysts, operators, and investigators…have mission needs to collaborate and share information with each other and with private sector partners and our foreign allies.” In other words, ISE serves as a conduit for the sharing of information gathered without a warrant. Known ISE partners include the Office of Director of National Intelligence which oversees 17 federal agencies and organizations, including the NSA. ISE utilizes these partnerships to collect and share data on the millions of unwitting people they track.

In practice, local data collection using ALPRs, stingrays, drones and other spy technologies create the potential for the federal government to obtain and store information on millions of Americans including phone calls, emails, web browsing history, location history, and text messages, all with no warrant, no probable cause, and without the people even knowing it.

In a nutshell, without state and local assistance, the feds have a much more difficult time gathering information. When the state limits surveillance and data collection, it means less information the feds can tap into. This represents a major blow to the surveillance state and a win for privacy.


HB181 has been referred to the House Financial Services Committee, where it will need a public hearing and a majority vote before it can advance in the legislative process.

TJ Martinell

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