HELENA, Mont. (May 22, 2023) – On Friday, Montana Governor Greg Gianforte signed a bill into law that prohibits financial institutions operating in the state from requiring a credit card merchant code to track the purchases of firearms and ammunition separating from other types of purchases.
Sen. Terry Vermeire introduced Senate Bill 359 (SB359) on Feb. 15. The law states its purpose is to “prohibit a financial institution from mandating firearms retailers to adopt a firearms code that is separate from a general merchandise retailer or sporting goods retailer.”
The law simply states that “a financial institution may not require a firearms retailer in this state to use a firearms code that is different from that of a general transaction.”
A firearms code is defined as “the merchant category code approved by the international organization for standardization for the purposes of initiating a card-based transaction for firearms retailers.”
The legislation first cleared the Senate on March 1 by a 41-9 vote. On April 17, the House passed the measure with some technical amendments by a 69-28 vote. Last month, the Senate concurred with a vote of 37-13. With Gov. Gianforte’s signature, it goes into effect on October 1.
In response to legislation like SB359, the major credit card payment networks have “paused” implementation of the firearms merchant code. 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 permanently.
In September 2022, the International Standards Organization, based in Switzerland, approved a new merchant category code for firearm and ammunition merchants. 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.
The three major credit card companies have “paused” development of the firearms merchant code, but only because of state bills like HB1110. 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.
IMPACT ON FEDERAL PROGRAMS
Data collected from this merchant code would almost certainly end up in federal government databases.
Concern about the misuse of federal 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 track the movement of millions of Americans, and obtain and store information on millions of Americans, including phone calls, emails, web browsing history and text messages, all with no warrant, no probable cause, and without the people even knowing it. A credit card merchant code on firearm and ammunition purchases will create another data collection point.
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.