RALEIGH, N.C. (April 10, 2023) – A bill introduced in the North Carolina House would prohibit financial institutions operating in the state from using a credit card merchant code to track the purchases of firearms and ammunition.

Rep. Reece Pyrtle (R) and 19 Republican cosponsors introduced House Bill 564 (H564) on April 4. The proposed law would ban financial institutions from using a firearms code in connection with a payment card transaction involving a firearm retailer in North Carolina.

The bill would also prohibit a financial institution from knowingly maintaining a record of individuals residing in this State who own firearms.

H564 explains the background for this bill in the legislative findings:

In September 2022, the International Organization for Standardization, based in Switzerland, approved a new merchant category code for firearms retailers. The new merchant category code would allow banks, payment card networks, and others involved in payment card processing to identify and separately track lawful payment card purchases at firearms retailers in North Carolina. This surveillance would cause a significant chilling effect on individuals in North Carolina wishing to exercise their federal and State constitutional rights to keep and bear arms.

Under HB564, the State Attorney General would be empowered to investigate violations of the law. Violators would be subject to a fine of up to $10,000. Gun stores and individuals would also be able to take civil action against any financial institution if it violates the law.

The three major credit card companies have “paused” development of the firearms merchant code, but only because of state bills like H295. In an email to Reuters, a Mastercard representative said such bills would cause “inconsistency” in how the code could be applied by merchants, banks and payment networks. The more states that ban such codes, the more likely this program gets scrapped altogether.


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 demonstrating 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.


H564 has been referred to the Committee on Banking, where it must get a hearing and pass the committee by a majority vote before moving forward in the legislative process.

TJ Martinell

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