Financial institutions will play a role in the prevention of gun violence under a bill by Assemblymember Phil Ting (D-San Francisco) approved by the California Legislature today. AB 1587 requires banks and credit card companies to implement in California the newly-developed merchant category code (MCC) assigned to gun dealers, enabling them to flag suspicious activity.
“For too long gun violence has plagued communities across the country and we must look to utilize every tool possible to end this epidemic. Identifying large purchases of guns and ammunition would be instrumental in helping California prevent tragedies and to save lives. Financial institutions can now be our partners in ending gun deaths since they are in a unique position to flag buying patterns that no one else can,” said Ting.
MCCs are 4-digit codes used all around the world, and each one is assigned to a particular industry. A year ago, the International Organization for Standardization (ISO) established an MCC for firearms retailers, bringing them in line with virtually all other retailers. Prior to that, they were coded as “sporting goods” or “other.” The change could be impactful because between 2007 and 2018 credit cards were used to finance at least eight major mass shootings. Gun safety advocates say law enforcement might have prevented these shootings had financial institutions alerted authorities.
“It defies common sense that separate merchant category codes are applied to nearly every type of business - like restaurants, toll roads, and even snowmobile dealers - but not to gun and ammunition sellers. As with human trafficking, merchant category codes hold the potential to thwart gun violence by identifying dangerous patterns, including when someone may be trafficking firearms or accumulating an arsenal to use in a mass shooting. Brady applauds the work of Assemblymember Ting and all co-authors who have worked to apply the new merchant category codes to gun and ammunition sellers and to get this life-saving legislation to the Governor,” said Ruth Borenstein, Brady CA Legislation and Policy Chair.
Some states, such as Texas and Florida, have banned the use of MCC for firearms, causing major credit card companies to announce that they are pausing implementation of MCCs for gun dealers. But Ting hopes his bill inspires financial institutions to forge ahead. They are already trained to submit Suspicious Activity Reports to the federal government when they suspect purchases are reflective of crimes, such as human trafficking, terrorism and fraud.
Governor Newsom will now consider AB 1587 and has until October 14, 2023 to sign or veto the bill.