MONTGOMERY, Ala. (May 1, 2024) – Yesterday, the Alabama House gave final approval to a bill that would prohibit financial institutions operating in the state from using a credit card merchant code to enable the tracking of firearm and ammunition purchases.
Sen. Tim Melson introduced Senate Bill 281 (SB281). Titled the Second Amendment Financial Privacy Act, the legislation would “prohibit a financial institution from requiring merchants to use a merchant category code (MCC) to distinguish a firearms retailer from a general merchandise retailer or a sporting goods retailer during a firearms transaction amounting to financial surveillance and from disclosing financial information regarding the transaction.”
Yesterday, the House passed the bill by a vote of 85-5. It previously passed the Senate unanimously, 32-0. The bill now heads to Gov. Kay Ivey’s desk for her consideration.
Under the proposal, 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 sale, purchase, return, or refund involving a payment card that is retrieved, characterized, generated, labeled, sorted, or grouped based on the assignment of a firearms code.”
The State Attorney General would be authorized to investigate alleged violations. Those found guilty in a court of law would be subject to a fine of no more than $10,000 per violation.
In response to legislation like SB281, 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.
IMPACT ON FEDERAL PROGRAMS
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.
WHAT’S NEXT
Gov. Ivey will have 6 days, excluding Sunday, to sign or veto SB281, or it becomes law without her signature.
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