NASHVILLE, Tenn. (July 1, 2024) – Today, a Tennessee law went into effect that will prohibit financial institutions operating in the state from using a credit card merchant category code that enables the tracking of firearm and ammunition purchases.

Sen. Jack Johnson and 14 cosponsors introduced Senate Bill 2223 (SB2223) in January. The new law prohibits any financial institution operation in the state from requiring or permitting “the assignment of a firearms code in a way that distinguishes a firearms retailer from other retailers.” “Firearms code” is defined in the bill as “a merchant category code approved by the International Organization for Standardization or an equivalent successor organization that is specifically assigned to a firearms retailer.”

SB2223 also prohibits all state and local government entities from keeping any list, record, or registry of privately owned firearms or the owners of such firearms. Financial institutions are prohibited from denying a transaction based on the code.

The Senate passed SB2223 by a 27-3 vote. The House concurred by a vote of 75-17. With Gov. Bill Lee’s signature in April, the law went into effect July 1.

The bill warns that a firearms merchant code would “have a significant chilling effect on citizens wishing to exercise their federal and state constitutional rights to keep and bear arms in Tennessee.”

The state attorney general would be authorized to investigate alleged violations of the law. Those found guilty would have 30 days to cease doing so, and if they refuse the AGO would be able to filed action in court. Upon conviction, the court would be able to impose a fine of up to $10,000 per violation.

Over the 2023-2024 legislative sessions, at least 14 states have passed similar legislation.


In response to legislation like SB2223, 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 more states that ban such codes, the more likely this program gets scrapped permanently.


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 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.

Mike Maharrey