A House committee on Thursday heard testimony — but delayed a vote — for a bill that some said would preserve gun owner privacy but that financial institutions feared could burden them with hefty compliance costs.
“This bill is in response to activism by large corporations and global organizations who sought to institute new merchant category codes to track firearm purchases,” Rep. Jake Teshka, R-North Liberty, told the committee.
An international standards organization — of which the U.S. is a member — approved a code specific to firearm sellers in 2022.
That decision followed advocacy from prominent Democrats like U.S. Senator Elizabeth Warren of Massachusetts, and was spearheaded by the self-described “socially responsible” Amalgamated Bank of New York, Reuters reports. At the time, advocates said the code could help track suspicious purchase activity linked to mass shootings.
Major payment networks like Mastercard and Visa announced in 2023 that they’d paused implementation work, citing pushback, according to Reuters. And several states have blocked use of the code.
Teshka and his bill’s supporters want Indiana to be the next.
House Bill 1084 would prohibit any governmental entities or others from keeping lists of privately owned firearms or their owners.
To that end, the bill seeks to prevent payment processors from labeling purchases with a firearm merchant-specific merchant category code. It would empower the attorney general to enforce that ban, laying out a legal process that could end in civil penalties of up to $10,000 per violation.
Such codes mark the retailer type but don’t indicate what was purchased. They’re often used for category-based credit card rewards or by consumers to budget.
Gun rights advocates call out ‘discrimination’
Guy Relford, the founder of a gun-rights group and Second Amendment attorney, asserted that mobile payment company Square had refused to do business with him because of his links to firearms. He also said he knew gun sellers whose banks had closed their accounts.
“The discrimination is real,” he said. “It’s not imagined.”
Some Democrat lawmakers suggested retailers and customers could still use cash, but Relford and other gun-rights advocates said that’s not realistic.
Relford noted that it’s infeasible to run a cash-only gun shop that doesn’t interact with financial institutions, and that some businesses have stopped accepting cash payments.
Rep. Kyle Pierce, R-Anderson, remarked that firearms cost thousands of dollars, and paying in cash could require keeping large sums of money on one’s person.
National Shooting Sports Foundation Government Relations Director Christopher Lee said he didn’t think the code would improve safety because it wouldn’t catch what’s purchased and could result in innocuous purchases being flagged.
“I don’t want my lawful purchases to be tracked and profiled,” he said.
Lee also suggested people trying to circumvent the new code would buy firearms at big box stores like Walmart — which would keep a general retailer code — instead of local gun shops.
Financial institutions worry
While no anti-gun witnesses testified on the bill, credit unions and banks said the bill stood to punish them for something outside their control.
“As credit unions in particular, most of us are small, local community institutions. We’re not Citibank, we’re not Chase. We’re not in Switzerland, or whatever,” said Chris Beaumont, the executive vice president of the Indiana Credit Union League. “And we’re trying to survive in a really competitive, really highly regulated industry and not get dragged into these kinds of conversations.”
Beaumont said it’s the payment networks that control whether the code gets used.
He and the Indiana Bankers Association’s Ross Teare said the networks pass the codes down to payment processors and depository institutions, which house the codes and other information “on the back end.”
They said the bill would require them to keep watch for codes on every transaction, then root out those that pop up.
Beaumont said that’s a “really high regulatory burden, particularly for a lot of smaller credit unions that just don’t have the manpower and technology.”
He went on to call the bill’s enforcement mechanism a “dream for lawyers.”
The bill is expected to be amended next week — to allay concerns from financial institutions — and then voted on.