This week, Tennessee Republican Governor Lee signed a measure into law that forbids banks and credit card companies, among other financial organizations, from keeping track of sales of guns and ammunition.
The “2nd Amendment Banking Privacy Act,” also known as House Bill 2762, forbids banking institutions from mandating that gun dealers use a particular merchant code “that differentiates a weapons retailer from a general merchandise shop or a sporting goods retailer.” Based on the products they offer, banks and credit card firms issue merchant codes to businesses, enabling them to monitor customer behavior and prevent fraudulent transactions. Typically, sports goods businesses and gun merchants combine their merchant codes.
Republican state representative Rusty Grills proposed the bill earlier this year in response to announcements from credit card firms Visa and Mastercard that they will begin to classify sales of firearms and ammunition separately starting in 2022.
The “Second Amendment Financial Privacy Act” also forbids government organizations from maintaining a registry of privately held firearms or gun owners in the state, and it forbids financial institutions from refusing credit card purchases “based solely on the non-assignment or assignment of a gun merchant category code.”
In a phone interview on Thursday, Rep. Grills informed The Daily Wire that the purpose of his legislation is to “protect the 2nd Amendment rights of all people in Tennessee” by prohibiting financial institutions from compiling “a database” of gun owners. Grills voiced his concerns about this possibility, pointing out that “capitalist woke folks” run many corporations. Grills went on to say that this new rule will thwart any future attempts by institutions to restrict Tenesseeans’ Second Amendment rights.
Grills stated, “We would prefer to be able to defend our rights up front rather than having to battle for them later on.”
Governor Lee signed the bill into law on Tuesday after it had cleared both the state House and Senate earlier in the month.
The International Organization for Standardization (IOS), which creates industrial, commercial, and proprietary standards, authorized a new merchant code exclusively for gun dealers in 2022.
When the IOS authorized the change, credit card firms quickly moved to separate gun transactions from other types of sales. Democratic lawmakers in Congress at the time also pushed American Express, Mastercard, and Visa to “do more to help deter mass shootings.”
But a few months later, the three credit card firms shelved their intentions to monitor gun sales when Republican senators and attorneys general alerted the payment processors to the proposal’s potential constitutional problems. However, according to a CBS News story in February of this year, Visa, Mastercard, and American Express advanced with a plan to perhaps track gun transactions in California.
Gun sellers must use the merchant code by May 2025, according to a California law, despite other Republican-led state legislatures banning the use of particular merchant codes.
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