GOP bill would ban merchant code specific to gun shops

Credit card companies have already 'paused' implementing the new code for gun sellers

A gun shop owner demonstrates how a gun lock works.
In this photo taken Tuesday, Oct. 2, 2018, gun shop owner Tiffany Teasdale demonstrates how a gun lock works on a handgun in Lynnwood, Wash. Elaine Thompson/AP Photo

A Republican bill would ban banks and credit card companies from using a merchandise code specific to gun retailers in Wisconsin — even though credit card companies already “paused” enacting the code months ago.

Gun control advocates celebrated when major credit card companies last year agreed to adopt a new code to categorize sales at gun shops. Merchant category codes categorize businesses based on the type of goods or services they provide.

All purchases made with credit cards are assigned such codes, from veterinary services to airline tickets.

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The Geneva-based International Organization for Standardization approved a new merchant category code for firearms retailers last year after activists said it would help track suspicious weapons purchases.

But American Express, Mastercard and Visa announced they were pausing implementation of the plan earlier this year after several Republican-led states moved to ban the use of the voluntary code. Now, GOP lawmakers are pursuing a similar ban in Wisconsin.

“The potential establishment of firearm specific (merchant category code) could have severe consequences, including flagging ordinarily large purchases as suspicious by the U.S. Treasury Department’s Financial Crimes Enforcement Network,” said Rep. Ty Bodden, R-Hilbert, at a public hearing Thursday.

“Moreover, it could result in lawful transactions made by law-abiding gun owners being reported to law enforcement agencies,” Bodden said.

The bill would prevent banks and credit card companies from using a merchant code that would differentiate a gun shop from a general merchandise or sporting goods store. It would also prohibit banks and credit card companies from declining a transaction based solely on a firearms code attached to the store.

The Wisconsin Department of Justice and other governmental agencies would be prohibited from “intentionally creating, storing, or maintaining a list of individuals who own firearms” based on merchant codes, according to the bill.

But gun control groups oppose the plan, including Anneliese Dickman, who works for the Brady Campaign to Prevent Gun Violence.

“This bill would leave me and you and all the other consumers of Wisconsin more vulnerable to credit card fraud and gun violence,” she said.

Dickman said merchant codes are ubiquitous, and no other code is banned in Wisconsin. The bill would offer special protections to firearms dealers, she said.

Dickman said the merchant code could help detect and deter illegal gun trafficking, and also prevent fraud by alerting customers of a suspicious purchase on their credit cards.

Supporters of the bill, including the National Rifle Association, said the code would be an infringement on privacy and Second Amendment rights.

Robert Welch, a lobbyist who represents a firearm owners group and the Wisconsin Bear Hunters Association, said the proposal would prevent banks from denying transactions at gun shops.

“The financial institution may not discriminate against the retailer by declining payment,” Welch said, reading what he said was a key passage of the bill.

Welch argued that a credit card company could use the code to decline all payments at a major retailer because of gun sales. If that happened, the retailers would quickly stop selling guns, he said.

“This is a way that a private institution could ban guns, and we don’t want that,” he said.