New York Attorney General Letitia James and California Attorney General Rob Bonta today called on three of the largest credit card companies in the nation to do their part to help end illegal gun trafficking and tackle gun violence. In a letter, the attorneys general urged American Express, Mastercard, and Visa to create a merchant category code (MCC) for all gun sales and to flag suspicious activity, such as large purchases of guns or ammunition, for law enforcement agencies. Using MCCs to identify suspicious gun and ammunition purchases could help law enforcement agencies prevent gun violence and reduce the risk of gun trafficking. The attorneys general sent their letter ahead of a subcommittee meeting at the International Organization for Standardization (ISO) conference, which makes decisions on MCCs.
“Credit card companies categorize purchases on nearly everything from groceries to gas to clothing, but no category exists for the multi-billion-dollar gun and ammunition industry,” said Attorney General James. “Categorizing gun sales can help us work with our partners in police departments to combat gun violence and save lives. This is a common-sense solution that credit card companies can implement to help keep New Yorkers, and all Americans, safer.”
“We must use every tool in our toolbox to combat the deadly threat of gun violence,” said California Attorney General Rob Bonta. “That means everyone in this country, including credit card companies, has an important part to play in our fight to save lives and combat senseless violence. Today, two of the largest states, with two of the strongest firearms safety laws, are standing together to call on credit card companies to create a spending category that would help law enforcement better identify terrorism and gun trafficking. This has never been more urgent — people are dying from gun violence each and every day. Preventing gun violence is on everyone: from law enforcement to business leaders to community members.”
MCCs exist for nearly every purchase from groceries to airline sales, but currently none exist for gun sales. Credit card companies are in a unique position to help law enforcement prevent gun violence. Several mass shooters in recent years have used credit cards to buy their weapons. Gun violence kills more than 40,000 Americans annually and is the leading cause of death for children and teens.
MCCs are four-digit codes, which classify merchants by the nature of their businesses. Credit card companies already use MCCs to flag concerns like money laundering or terrorism. Financial institutions and payment networks — including Visa, Mastercard, and American Express — use the ISO standard to assign MCCs to merchants in order to determine interchange rates, assess transaction risks, and generally categorize payments. MCC codes range from general to highly specific — for example, while electric razor stores, tent stores and leather goods stores all currently have unique codes, there is no unique code for brick-and-mortar gun stores: gun and ammunition retail outlets are instead classified as “miscellaneous” or “sporting goods.”
The ISO’s Registration and Maintenance Management Group (RMMG), whose members represent senior industry experts, include representatives from major credit card companies such as American Express, Mastercard, and Visa. These representatives evaluate applications for new merchant categories and may vote to approve the category if the following criteria are met:
- The merchant category is reasonable and substantially different from all other merchant categories currently represented in the list of code values;
- The merchant category is separate and distinct from all other industries currently represented in the list of code values;
- The proposal describes a merchant category or industry, and not a process;
- The minimum annual sales volume of merchants included in the merchant category, taken as a whole is, $10 million; and
- Sufficient justification for the addition of a new code is found.
On July 6, 2021, Amalgamated Bank applied to ISO for a new category code for standalone gun and ammunition retail stores, but their application was denied by the RMMG that October. Amalgamated Bank then filed an appeal of its initial application on November 23, 2021, only to be denied again in February of 2022. On June 21, 2022, Amalgamated Bank once again applied to the ISO for a new MCC. The attorneys general urges the RMMG, including its representatives from credit card companies, to approve the application.