Recently, we updated readers on New Jersey lawmakers’ efforts to establish a requirement for a special firearms-specific Merchant Category Code (MCC) for gun purchases. Meanwhile, in a contrasting move, another state has enacted a law prohibiting the use of these codes to safeguard the privacy of gun buyers and owners.
South Dakota Senate Bill 81 would ban the use of a firearm MCC in transactions related to firearms, accessories, components and ammunition and impose a civil penalty for anyone who violates this act by using the code. Gov. Larry Rhode signed the measure into law on February 26.
“I am proud to protect our Second Amendment rights with the signing of this bill,” Gov. Rhoden in a press release announcing the signing. “South Dakota has seen strong growth of our firearm industry, and this bill will help that continue. I am grateful that both the bankers and the firearm industry came together on this issue.”
A private signing ceremony was held that included representatives from South Dakota’s growing firearms industry, South Dakota’s banking industry, the National Rifle Association and prime sponsors of the bill.
At issue is the widely disparate state response to a new MCC for gun purchases adopted by the International Organization for Standardization in 2022. MCCs are used by payment processors (like Visa and Mastercard) and other financial services companies to categorize transactions.
Prior to the creation of the specific code for guns, firearms retailers fell under the MCC for sporting goods stores or miscellaneous retail. If the new code is used, credit card companies and other payment processors can tell the purchases were firearms.
Pro-gun states have struck back hard against the use of the code, with Utah, Kentucky, Iowa, Tennessee, Georgia, Wisconsin and Indiana passing laws last year to outlaw the use of the gun-specific MCC in those states. Less gun-friendly states, however, like Colorado and California, have actually passed laws requiring the use of the code.
The National Shooting Sports Foundation (NSSF), the firearm industry trade association, has worked diligently over the past few years to assist states in passing legislation on the MCC issue. Lawrence G. Keane, NSSF senior vice president and general counsel, was quick to praise Gov. Rhoden for signing the measure.
“Governor Rhoden is taking a strong stand against ‘woke’ Wall Street banks that seek to intrude on the private financial transaction when South Dakotans exercise their lawful right to buy firearms and ammunition,” Keane said in an NSSF news release. “Gun owners should worry about what’s in their wallets, not who. Financial institutions, especially if they are colluding with government agencies, should not be interfering in the free exercise of Second Amendment rights by law-abiding Americans. Gun owners should never have to fear being placed on a secret government watchlist simply for exercising their Constitutionally-protected rights to keep and bear arms.”
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