More than 100 House Republicans are demanding answers from major credit card companies over the controversial decision to categorize gun sales.
In letters to the CEOs of Visa, MasterCard, and American Express, Rep. Elise Stefanik (R-NY) and House Republicans demanded the companies answer questions about their decision to adopt new Merchant Category Codes (MCCs) set by the International Organization for Standardization (ISO) that would categorize gun purchases separately from other purchases. The Republican members asked the creditors to provide their prospective standards to the public, and questioned whether categorizing gun purchases and flagging law enforcement was an attempt to skirt federal law by effectively creating a gun registry.
“As you know, the ISO uses four-digit codes known as MCCs to classify merchants and businesses by the type of goods or services provided,” the members began. “There were already two MCCs that captured legal firearm sales, 5999 for Miscellaneous Retail Stores and 5941 for Sporting Goods Stores.”
In July 2021, the left-wing activist banking firm Amalgamated Bank applied for the ISO to adopt a separate Category Code for firearm dealers. The ISO rejected the application in October, along with an appeal filed in November 2021, the Republican members noted. The ISO said at the time that such a narrow category would fail to capture gun sales at sporting goods stores and would place an undue burden on small firearm retailers.
Both Visa and American Express raised concerns about the effort to establish a firearm-specific MCC. “Specific MCC [codes] in narrow [retail] areas are challenging,” an employee from American Express told CBS News in September. “Managing long lists of narrowly defined MCCs can become burdensome if there isn’t a compelling reason for the long list.”
Visa also urged caution, warning against financial institutions acting as moral arbiters. “We believe that asking payment networks to serve as a moral authority by deciding which legal goods can or cannot be purchased sets a dangerous precedent,” the company wrote in a letter to Congressional Democrats who pushed for the credit card companies to adopt the new standard, via CBS.
Amalgamated Bank reapplied for the new MCC in June of this year. This time, the ISO relented, adopting the new MCC. Amalgamated Bank subsequently “stated its intent to utilize software to flag allegedly suspicious purchases made by Americans exercising their Second Amendment rights and file these red flags with law enforcement,” the lawmakers noted. “Of course, there is no accepted, consistent, scientific, or legitimate way to determine from this data what is and what is not a ‘suspicious’ purchase. A gun control advocate could view any desire to own or obtain a firearm as per se suspicious. Instead, this is a transparent attempt to chill the exercise of constitutionally protected rights and to circumvent existing legal restrictions on the creation of firearm registries by the government.”
The lawmakers then asked the credit card giants to answer questions about their intentions in adopting the new standards:
- Whether the companies actually support the ISO’s decision to create the new MCC, and if so, why the companies changed their view.
- What criteria the companies will use to flag transactions for suspicious activity; how these criteria were devised, and what evidence there is to show that they will only focus on criminal intent and not on lawful purchases; and whether the companies will make these criteria public and share them with their cardholders.
- How the companies will inform users about the impacts of implementing the policy; and whether they will notify and solicit feedback from customers.
- Whether the companies will notify customers when their lawful transactions have been flagged and sent to law enforcement; if not, why they believe that it is not important to notify the customer.
- Whether the companies have considered the “reputational risks and the possible implications for your
fiduciary duties to shareholders” of potentially alienating a sizable number of the 100 million gun owners in the United States and the millions of prospective and potential gun buyers.
- If the companies are aware this move could be perceived as an attempt to circumvent federal law by effectively creating a national firearm registry.
- Whether the companies solicited input from the firearm industry before making this decision.
- Whether the companies did their due diligence, including considering DOJ statistics, which show that a very small percentage of those who commit crimes with guns purchase them at gun stores subject to the new rules.
A total of 101 House Republicans signed the letter.