March 16, 2023
ATTORNEY GENERAL RAOUL CONDEMNS MAJOR CREDIT CARD COMPANIES’ REVERSAL OF PLEDGE TO IMPLEMENT MERCHANT CODE TO HELP FLAG POTENTIAL MASS SHOOTERS AND GUN TRAFFICKERS
Chicago — Attorney General Kwame Raoul, as part of a coalition of attorneys general from across the nation, today condemned four of the world’s largest credit card companies – Visa, American Express, Mastercard and Discover – for walking back their commitment to implement a new merchant code for gun sales that would help prevent mass shootings and curb gun violence.
In October, Raoul expressed support after Visa, American Express and Mastercard publicly announced plans to add a new merchant code for gun retailers to the hundreds already used to categorize merchant sales. The creation of the new code had been approved in September by the Switzerland-based International Organization for Standardization to allow financial institutions to better detect and report suspicious activities related to the purchase of firearms and ammunition at standalone gun retail stores. In February 2023, Discover announced that it too would begin using the new code.
But in an abrupt about-face last week, all four companies announced they would not implement the code, citing legislation in several states seeking to bar or limit the use of the voluntary code as a supposed incursion on Second Amendment rights. In a letter sent to the chief executives of Visa, American Express, Mastercard and Discover today, Raoul and 14 attorneys general accused the companies of capitulating to political pressure cloaked in specious legal arguments and amorphous veiled threats from certain state attorneys general.
“As state attorneys general, we are committed to enhancing public safety, and we welcomed Visa, American Express, Mastercard and Discover to that effort when the companies announced plans to add a new merchant code for gun retailers. Doing so would have given law enforcement an important new tool in addressing gun violence,” Raoul said. “I am disappointed that these same companies are now caving to political pressure and reversing course. I urge them to follow through with a merchant category for gun stores – which already exist for numerous everyday items – to help law enforcement identify unlawful transactions.”
In the letter, Raoul and the attorneys general remind the credit card companies that the newly-created code for gun stores is hardly an extraordinary development. The companies already use such codes to categorize basic transactions for everyday items like flowers and groceries, and already have hundreds of retailer codes for everything from stamp shops and wig stores to car rental agencies and various government services. The new code simply creates a unique merchant category for gun stores, which previously were categorized as “sporting goods stores” or “general merchandise.”
The new code, narrowly tailored so that it applies only to purchases made at independently-owned gun retail shops, will have no bearing on an individual’s ability to lawfully purchase firearms, the letter states. It will, however, help financial institutions and law enforcement agencies identify individuals engaging in unlawful transactions, including the purchase of prohibited firearms, such as ghost guns or assault weapons; straw buyers engaged in trafficking; and high-risk purchasers trying to avoid detection in amassing an arsenal that could be used for mass shootings.
The letter points out that enabling financial institutions to detect and flag threatening patterns and potential criminal activity for law enforcement is nothing new, as they have been doing it for decades. For instance, federal law requires Suspicious Activity Reports when banks “detect a known or suspected violation of Federal law or a suspicious transaction related to a money laundering activity or a violation of the Bank Secrecy Act,” the letter states. The letter asserts that state and federal law enforcement agencies often request evidence relating to firearms or other investigations. However, the ability of financial institutions or law enforcement to take steps against criminal gun purchases is hampered by the lack of a dedicated code for firearm and ammunition retailers.
In today’s letter, Raoul and the attorneys general urged the companies to stay true to the commitment they made in September and not cave under political pressure and unfounded legal threats. They argue that to do so would set a precedent that invites further interference in lawful, protected business practices.
“We hope and expect you will reconsider your decision and not abandon your public commitments. Should you fail to do so, your complicity with ongoing needless gun tragedies will lead us to consider further actions,” the letter concludes.
Joining Attorney General Raoul in sending the letter are the attorneys general of California, Connecticut, Delaware, the District of Columbia, Hawaii, Maryland, Massachusetts, Minnesota, New Jersey, New York, Nevada, Oregon and Rhode Island.