Alabama Considers Banning Gun Codes for Credit Cards

Last week, Alabama lawmakers voiced their approval for a bill that would make it illegal for credit card companies to track gun-related purchases. It’s part of a growing movement among some states that are opposed to such a measure, calling it backdoor gun registration.

The Bill

The bill, introduced by Representative Shane Stringer, has been dubbed House Bill 389 (HB389). If passed, the law would ban credit card companies who do business in Alabama from using Merchant Category Codes (MCCs) to flag gun-related purchases.

An MCC is a type of code that merchants use to categorize buying activity. Currently, credit card companies use more than 500 different MCCs to classify everything from food to cars. Gun-related purchases fall under the category of “sporting goods” these days.

The bill goes on to state that credit card companies may not share any gun-related purchase information unless it has written consent from the buyer or a court-ordered subpoena.

It’s important to note that this bill is still in its early stages. It still needs to pass votes in Alabama’s House and Senate. Then, Governor Kay Ivey (a staunch Republican) would need to sign it into law.

The Context

I previously reported on Utah’s state government passing a similar bill. If Alabama passes this law, it would be the 8th state to do so.

States are proposing these kinds of laws in response to a new California law. California passed a law this year that said any credit card company who wants to do business in the state must implement firearm-related MCCs.

However, that’s easier said than done. Major credit card companies have taken notice of the burgeoning conflict between states that want MCCs for firearms and those that don’t. What’s more, they’ve said that because of this conflict, they’re going to wait on fully implementing gun-related MCCs.

For example, Robert B. Thompson III, a senior VP at Visa, said that "given the conflicting state laws on this topic and the likelihood that other states will enact legislation to either restrict or mandate the code, our implementation pause remains in effect.”

Final Thoughts

Things are definitely starting to get interesting in the fight over MCCs for firearms. If a state with a large population – say, Texas – were to pass a law like this one, credit card companies would effectively lose more money by implementing gun-related MCCs than by not implementing them.

That would start a chain reaction. If, say, Visa were to decide that they weren’t going to implement MCCs for guns, they wouldn’t be able to do business in California. That means that no one in California would be able to use a Visa credit card.

Obviously, if that happened, it would be years away. But it’s something to keep in mind when it comes to the debate over gun-related MCCs. We’ll keep reporting on the situation as it develops.