Gun safety advocates hope the new merchant code will change this. But banks do not know what individual items were purchased with a credit card or if a retailer is a gun seller. 11, 2001, Congress passed a law, aimed at preventing domestic terrorism, that generally requires banks to flag suspicious transactions. Gun rights advocates say giving gun stores a specific code - known as a Merchant Category Code - could be used to block gun transactions or track gun owners.Īfter the terrorist attacks of Sept. But, until now, there was no code for gun stores, often making those transactions indistinguishable within the financial system from those at a retailer that sold fishing rods or tents. Virtually every retailing category in the United States has a code that is attached to each credit card transaction - hair salons have one code, for example, while movie theaters have another. None of the purchases were flagged by credit card companies or banks. Letitia James, the New York attorney general, called the decision “a big victory,” adding, “I urge credit card companies to take the next step and flag suspicious transactions on gun and ammunition sales, like they do for fraud and money laundering.” Many of the banks and credit card companies in question are based in New York.Ī series of articles in the Times in 2018 identified that the guns used in a majority of the most deadly mass shootings in America had been bought legally with credit cards. “In order for this new merchant code to be maximally effective, every financial institution and payment system needs to step up and put it to use.” Elizabeth Warren, D-Mass., one of the lawmakers who have been vocal on the issue. “This approval is an important step towards improving coordination with law enforcement and preventing gun violence,” said Sen. Sign up for The Morning newsletter from the New York Times
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