OKLAHOMA CITY, Okla. (Dec. 11, 2024) – A bill introduced in the Oklahoma Senate 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. Micheal Bergstrom filed Senate Bill 16 (SB16). The legislation would bar financial institutions operating in the state from using a merchant category code to track or identify purchases of firearms, firearms accessories and ammunition.
“A payment card network shall not require or incentivize the use of a merchant category code in a manner that distinguishes a firearm retailer from other retailers.”
The proposed law also bars financial institutions from even assigning such codes: “a firearm retailer a merchant category code that distinguishes the firearm retailer from other retailers.”
Language in the bills explicitly prohibits both government and private entities from keeping a list or registry of privately owned firearms.
To date, at least 14 states have banned the use of firearms merchant codes.
IMPACT ON FEDERAL PROGRAMS
In response to legislation like SB16, the major credit card payment networks “paused” implementation of the firearms merchant code in March 2023.
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 July 2024, Visa and Mastercard told USA Today that they were only using the firearms code in the states that require it by law.
Additionally, data collected from this merchant code would almost certainly end up in federal government databases.
In a nutshell, without the code, the feds can’t gather and compile information on firearms purchases. 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.
BACKGROUND
Merchant Category Codes (MCCs) have their roots in the IRS. They were created to classify different types of businesses and to identify the goods and services they sell. This was sold as an improvement for better tax reporting, and is still touted, as CNBC put it, as a tool to help “prevent things ranging from fraud to human trafficking.” But as is so often the case, “it’s for your safety” morphed into “so we can control you.”
In September 2022, the International Standards Organization, based in Switzerland, approved a new merchant category code for firearm and ammunition merchants. Many of the bills passed specifically reference the code “5723.”
In effect, the firearms code is a de facto gun registry.
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 firearms and ammunition purchases in cooperation with law enforcement.
The more states that ban such codes, the more likely this program gets scrapped permanently.
WHAT’S NEXT
SB16 will be referred to committee when the legislative session begins on Feb. 3.
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