[House Report 119-522]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 119-522
======================================================================
PROTECTING PRIVACY IN PURCHASES ACT
_______
February 25, 2026.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1181]
The Committee on Financial Services, to whom was referred
the bill (H.R. 1181) to prohibit payment card networks and
covered entities from requiring the use of or assigning
merchant category codes that distinguish a firearms retailer
from general-merchandise retailer or sporting-goods retailer,
and for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 3
Committee Consideration.......................................... 4
Related Hearings................................................. 5
Committee Votes.................................................. 6
Committee Oversight Findings..................................... 9
Performance Goals and Objectives................................. 9
Committee Cost Estimate.......................................... 9
New Budget Authority and CBO Cost Estimate....................... 9
Unfunded Mandates Statement...................................... 9
Earmark Statement................................................ 9
Federal Advisory Committee Act Statement......................... 10
Applicability to the Legislative Branch.......................... 10
Duplication of Federal Programs.................................. 10
Section-by-Section Analysis of the Legislation................... 10
Changes in Existing Law Made by the Bill, as Reported............ 11
Documents Included by Unanimous Consent.......................... 12
Minority Views................................................... 15
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting Privacy in Purchases Act''.
SEC. 2. DISTINGUISHING FIREARM RETAILERS PROHIBITED.
(a) Prohibitions Relating to Merchant Category Codes.--
(1) For payment card networks.--A payment card network may
not require--
(A) a firearms retailer to use a merchant category
code that--
(i) is used only or primarily for firearms
retailers; or
(ii) identifies such retailer as engaged in
the business of selling firearms, ammunition,
accessories of firearms, or components of
firearms; or
(B) a covered entity to assign a merchant category
code that is used only or primarily for firearms
retailers or that identifies a firearms retailer as
engaged in the business of selling firearms.
(2) For covered entities.--A covered entity may not assign to
a firearms retailer any merchant category code that is used
only or primarily for firearms retailers or that identifies
such retailer as engaged in the business of selling firearms,
ammunition, accessories of firearms, or components of firearms.
(b) Enforcement.--
(1) In general.--The Attorney General shall enforce this
section and shall, not later than 90 days after the date of the
enactment of this section, establish a process for individuals,
including firearms retailers, to submit complaints relating to
alleged violations of this section.
(2) Investigation.--The Attorney General shall investigate
any complaint received through the processes established by the
Attorney General under paragraph (1).
(3) Written notice.--If the Attorney General determines,
after conducting an investigation under paragraph (2), that a
payment card network or covered entity has violated this
section, the Attorney General shall send a written notice of
such violation to such payment card network or covered entity
that requires the payment card network or covered entity to
remedy the violation not later than 30 days after the date on
which the payment card network or covered entity receives such
notice.
(4) Injunction.--
(A) In general.--If a payment card network or covered
entity does not remedy a violation within 30 days of
receiving a written notice under paragraph (3), the
Attorney General may bring an action in Federal court
to enjoin the violating behavior.
(B) No private right of action.--This Act does not
create a private right of action.
(c) Preemption.--
(1) In general.--Any law of a State or local government
regulating the assignment, use, or disclosure of merchant
category codes that are used only or primarily for firearms
retailers or that identifies a retailer as engaged in the
business of selling firearms, ammunition, accessories of
firearms, or components of firearms is hereby preempted.
(2) Limitation.--Notwithstanding paragraph (1), nothing in
this Act may be construed to prevent a payment card network or
a covered entity from complying with any Federal, State, or
local law or regulations related to dispute processing, fraud,
compliance management, or protecting transaction integrity from
concerns related to illegal or suspicious activities, data
breaches, or cyber risks.
(d) Report.--The Attorney General shall, each year, submit a report
to the Congress that--
(1) identifies the number of investigations undertaken by the
Attorney General under subsection (b);
(2) includes a summary of such investigations and their
disposition; and
(3) provides any available data and analysis that relates to
the effectiveness of this Act.
(e) Definitions.--In this Act:
(1) Ammunition.--The term ``ammunition'' has the meaning
given the term in section 921(a)(17)(A) of title 18, United
States Code.
(2) Covered entity.--The term ``covered entity'' means any
entity that--
(A) has on the date of the enactment of this section,
or establishes after the date of the enactment of this
section, a relationship with a merchant for the
purposes of processing credit, debit, or prepaid
transactions; or
(B) has on the date of the enactment of this section,
or establishes after the date of the enactment of this
section, a relationship with an entity that establishes
a relationship with a merchant for the purposes of
processing credit transactions, debit transactions, or
prepaid transactions.
(3) Firearm.--The term ``firearm'' means--
(A) a ``firearm'' as such term is defined in section
921(a)(3) of title 18, United States Code;
(B) a ``shotgun'' as such term is defined in section
921(a)(5) of title 18, United States Code;
(C) a ``rifle'' as such term is defined in section
921(a)(7) of title 18, United States Code;
(D) an ``antique firearm'' as such term is defined in
section 921(a)(16) of title 18, United States Code;
(E) a ``semiautomatic rifle'' as such term is defined
in section 921(a)(29) of title 18, United States Code;
and
(F) a ``handgun'' as such term is defined in section
921(a)(30) of title 18, United States Code.
(4) Firearms retailer.--The term ``firearms retailer'' means
a person, entity, or retail location physically located in the
United States that is engaged in the business of selling or
trading--
(A) firearms;
(B) ammunition;
(C) accessories of firearms; or
(D) components of firearms.
(5) Merchant category code.--The term ``merchant category
code'' means a multi-digit code, issued by the International
Organization for Standardization, for the purposes of enabling
the classification of merchants into specific categories based
on the type of business, trade, or services supplied.
(6) Payment card network.--The term ``payment card network''
means an entity that directly or through a network participant,
processor, or agent provides proprietary services,
infrastructure, software, or hardware used to authorize, clear
and settle credit, debit, or prepaid transactions.
PURPOSE AND SUMMARY
H.R. 1181, the Protecting Privacy in Purchases Act, was
introduced on February 11, 2025, by Republican Representative
Riley Moore (WV-02). This bill prohibits payment card networks
from requiring the use of or assigning Merchant Category Codes
(MCCs) that distinguish a firearms retailer from general
merchandise or sporting-goods retailers.
BACKGROUND AND NEED FOR LEGISLATION
As evidenced in Operation Choke Point under President Obama
and Operation Choke Point 2.0 under President Biden, law-
abiding Americans have been victims of government encroachment
on their financial privacy. Federal banking agencies have
increasingly pressured financial institutions and payment
processors to monitor or restrict lawful transactions based on
political or reputational considerations. This coordination
between regulators and private firms has raised legitimate
concerns about the weaponization of the financial system
against constitutionally protected behavior.
H.R. 1181 establishes critical guardrails to ensure that
Federal banking agencies do not coerce financial institutions
or payment processors into surveilling, flagging, or debanking
law-abiding customers.
COMMITTEE CONSIDERATION
119TH CONGRESS
On February 11, 2025, Representative Moore (WV) introduced
H.R. 1181, the Protecting Privacy in Purchases Act, with
Representatives Andy Barr (R-KY), Richard Hudson (R-NC), Aaron
Bean (R-FL), Ben Cline (R-VA), Scott Perry (R-PA), Beth Van
Duyne (R-TX), Brett Guthrie (R-KY), Mike Collins (R-GA), Brad
Finstad (R-MN), Barry Moore (R-AL), Daniel Webster (R-FL),
Michael Guest (R-MS), Michael Rulli (R-OH), Roger Williams (R-
TX), Clay Higgins (R-LA), Mike Bost (R-IL), Claudia Tenney (R-
NY), Derek Schmidt (R-KS), Tim Moore (R-NC), Dan Newhouse (R-
WA), James Comer (R-KY), Steve Womack (R-AR), John Rose (R-TN),
Rudy Yakym (R-IN), Brandon Gill (R-TX), and John Rutherford (R-
FL) as original cosponsors. Representatives Lauren Boebert (R-
CO), Mark Messmer (R-IN), Addison McDowell (R-NC), Andy Biggs
(R-AZ), Darrell Issa (R-CA), Mark Green (R-TN), Jack Bergman
(R-MI), Jodey Arrington (R-TX), Bill Huizenga (R-MI), Mike
Kennedy (R-UT), Monica De La Cruz (R-TX), Joe Wilson (R-SC),
Scott DesJarlais (R-TN), Andrew Clyde (R-GA), Nick LaLota (R-
NY), Sam Graves (R-MO), Mike Rogers (R-AL), Lance Gooden (R-
TX), David Kustoff (R-TN), Diana Harshbarger (R-TN), Nick
Langworthy (R-NY), Mark Amodei (R-NV), Greg Murphy (R-NC), John
Moolenaar (R-MI), Buddy Carter (R-GA), Austin Scott (R-GA),
Derrick Van Orden (R-WI), Glenn Grothman (R-WI), David Valadao
(R-CA), Bob Latta (R-OH), Randy Weber (R-TX), Troy Nehls (R-
TX), Ashley Hinson (R-IA), Tim Walberg (R-MI), Doug LaMalfa (R-
CA), David Rouzer (R-NC), Pete Sessions (R-TX), Andy Harris (R-
MD), Ann Wagner (R-MO), Gus Bilirakis (R-FL), Pete Stauber (R-
MN), Scott Franklin (R-FL), Tracey Mann (R-KS), Chuck Edwards
(R-NC), Blake Moore (R-UT), Julia Letlow (R-LA), Ron Estes (R-
KS), Paul Gosar (R-AZ), Dale Strong (R-AL), Jefferson Shreve
(R-IN), Randy Feenstra (R-IA), Adrian Smith (R-NE), Tom Tiffany
(R-WI), Chuck Fleischmann (R-TN), Michael Cloud (R-TX), Jake
Ellzey (R-TX), Scott Fitzgerald (R-WI), Robert Aderholt (R-AL),
Kevin Hern (R-OK), August Pfluger (R-TX), Ryan Zinke (R-MT),
Brian Babin (R-TX), Mike Ezell (R-MS), Don Bacon (R-NE), Max
Miller (R-OH), Pat Harrigan (R-NC), John McGuire (R-VA), Tony
Gonzales (R-TX), Trent Kelly (R-MS), Guy Reschenthaler (R-PA),
Dan Crenshaw (R-TX), Jeff Hurd (R-CO), Craig Goldman (R-TX),
Gabe Evans (R-CO), Brian Jack (R-GA), Barry Loudermilk (R-GA),
Mark Harris (R-NC), Michael Baumgartner (R-WA), Pat Fallon (R-
TX), Elise Stefanik (R-NY), Jeff Van Drew (R-NJ), Mike
Haridopolos (R-FL), Greg Steube (R-FL), Dan Meuser (R-PA), Mary
Miller (R-IL), Lisa McClain (R-MI), William Timmons (R-SC),
Wesley Hunt (R-TX), Troy Downing (R-MT), Tony Wied (R-WI),
Julie Fedorchak (R-ND), Marlin Stutzman (R-IN), Abe Hamadeh (R-
AZ), Laurel Lee (R-FL), Nick Begich (R-AK), Russell Fry (R-SC),
Ronny Jackson (R-TX), Sheri Biggs (R-SC), Dave Taylor (R-OH),
Nathaniel Moran (R-TX), Michelle Fischbach (R-MN), Jimmy
Patronis (R-FL), Zack Nunn (R-IA), Warren Davidson (R-OH) and
Burgess Owens (R-UT) and David Joyce (R-OH) were added
subsequently as cosponsors.
The bill was referred solely to the Committee on Financial
Services. H.R. 1181 was attached to the April 29, 2025, hearing
titled ``Regulatory Overreach: The Price Tag on American
Prosperity.''
On December 16, 2025, the Committee on Financial Services
met in open session to consider, among others, H.R. 1181. The
Committee ordered H.R. 1181, as amended, to be reported with a
favorable recommendation to the House of Representatives.
118TH CONGRESS
On February 23, 2024, Representative Stefanik introduced
H.R. 7450, the Protecting Privacy in Purchases Act, with
Representatives Barr and Hudson as original cosponsors.
Representatives Miller (IL), Bean, Walberg, Kat Cammack (R-FL),
Guest, Hinson, Higgins, Moolenaar, Ralph Norman (R-SC), Mike
Waltz (R-FL), James Baird (R-IN), Smith (NE), Grothman, Issa,
Loudermilk, Moore (AL), Victoria Spartz (R-IN), Weber,
Aderholt, LaLota, Bill Posey (R-FL), Green (TN), Fischbach,
DesJarlais, Nehls, Hern, Fleischmann, Hunt, Austin Scott, Fry,
Reschenthaler, Bilirakis, Rogers, Franklin, Tenney, Mann, Tony
Gonzales, Yakym, Rutherford, Fallon, Babin, Cloud, Jerry Carl
(R-AL), Collins, LaMalfa, Matt Rosendale (R-MT), Murphy (NC),
Williams (TX), Harris (MD), Andrew Ogles (R-TN), Comer,
Sessions, Rouzer, Ronny Jackson, Gooden, Amodei, Edwards,
Carter, Jim Banks (R-IN), McClain, Stephanie Bice (R-OK),
Perry, Finstad, Huizenga, Kelly, Pfluger, Wagner, Morgan
Griffith (R-VA), Jeff Duncan (R-SC), Graves, John Joyce (R-PA),
Boebert, Wilson, Feenstra, Guthrie, Steube, Stauber, Cline,
Arrington, Womack, Miller (OH), Dan Bishop (R-NC), Clyde, Larry
Bucshon (R-IN), John Curtis (R-UT), Debbie Lesko (R-AZ),
Kustoff, Biggs (AZ), Gosar, Tiffany, Letlow, Brad Wenstrup (R-
OH), Neal Dunn (R-FL), Harshbarger, Langworthy, Robert Wittman
(R-VA), Moore (UT), Crenshaw, Fitzgerald, Timmons, Erin Houchin
(R-IN), Estes, Rose, Bergman, Dusty Johnson (R-SD), Mark Alford
(R-MO), Cory Mills (R-FL), Lee, Bost, Van Duyne, De La Cruz,
Zinke, Ezell, Kelly Armstrong (R-ND), Eric Burlison (R-MO),
Strong, Ellzey, Newhouse, Valadao, Ken Calvert (R-CA), and
Bacon were added subsequently as cosponsors. The bill was
referred solely to the Committee on Financial Services.
In addition, on April 8, 2024, Senator Bill Hagerty (R-TN)
introduced S.4075, the Protecting Privacy in Purchases Act, a
related bill to H.R. 7450. The bill was referred solely to the
Committee on Banking, Housing, and Urban Affairs.
There was no further legislative action on H.R. 7450 or
S.4075 in the 118th Congress.
RELATED HEARINGS
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearing was used to
develop H.R. 1181:
The Subcommittee on Financial Institutions held an April
29, 2025, hearing titled, ``Regulatory Overreach: The Price Tag
on American Prosperity.'' The Subcommittee heard testimony
from: Ms. Sarah Flowers, Senior Vice President, Senior
Associate General Counsel, Bank Policy Institute; Mr. J.
Michael Radcliffe, Chairman and Chief Executive Officer,
Community Financial Services Bank (Benton, KY); Mrs. Margaret
E. Tahyar, Partner, Head of Financial Institutions Group, Davis
Polk & Wardwell LLP; and the Honorable Graham Steele, Academic
Fellow, Rock Center for Corporate Governance, Stanford Law
School.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include record
votes on the motion to report legislation and amendments
thereto.
On December 16, 2025, the Committee ordered H.R. 1181, as
amended, to be reported favorably to the House by a recorded
vote of 29 yeas and 23 nays, a quorum being present. (Record
Vote No. FC-218).
The Committee considered the following amendments to H.R.
1181:
Representative Loudermilk offered an
amendment in the nature of a substitute, designated
MOOREWV_037, which made minor edits and technical
changes. This amendment was adopted by a voice vote.
Representative Sam Liccardo (D-CA) offered
an amendment (No. 3), designated LICCAR_078. This
amendment would limit the bill's exception on the
assignment and use of Merchant Category Codes if use is
mandated under state law. The amendment also strikes
the bill's provision on federal pre-emption. This
amendment was defeated by a recorded vote of 23 yeas
and 29 nays, a quorum being present. (Record Vote No.
FC-217).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 1181 is to establish
guardrails to ensure Federal banking agencies do not coerce
financial institutions or payment processors into surveilling,
flagging, or debanking law-abiding citizens.
COMMITTEE COST ESTIMATE
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 1181. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee will adopt as its own
the cost estimate by the Director of the Congressional Budget
Office once it has been prepared.
NEW BUDGET AUTHORITY AND CBO COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee will adopt as
its own the cost estimate for the bill prepared by the Director
of the Congressional Budget Office. However, a cost estimate
was not made available to the Committee in time for the filing
of this report. The Chairman of the Committee shall cause such
estimate to be printed in the Congressional Record upon its
receipt by the Committee.
UNFUNDED MANDATES STATEMENT
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Chairman of the Committee shall cause
such estimate to be printed in the Congressional Record upon
its receipt by the Committee.
EARMARK STATEMENT
In compliance with clause 9 of rule XXI of the Rules of the
House of Representatives, this bill, as reported, contains no
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.
FEDERAL ADVISORY COMMITTEE ACT STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO THE LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
Section 1 provides the short title is the ``Protecting
Privacy in Purchases Act''.
Section 2. Distinguishing firearm retailers prohibited
Section 2 prohibits a payment card network from requiring a
firearms retailer to use a merchant category code that is used
only or primarily for firearms retailers, or identifies such
retailer as engaged in the business of selling firearms,
ammunition, accessories of firearms, or components of firearms.
This section also prohibits a covered entity from assigning a
merchant category code that is used only or primarily for
firearms retailers or that identifies a firearms retailer as
engaged in the business of selling firearms. A covered entity
is defined as any entity that has on the date of the enactment
of this Act, or establishes after the date of enactment, a
relationship with a merchant for the purposes of processing
credit, debit, or prepaid transactions.
Section 2 grants authority to the Attorney General to
enforce this section and shall, no later than 90 days after
enactment, establish a process for individuals, including
firearms retailers, to submit complaints relating to alleged
violations. If a violation takes place, the Attorney General
shall investigate any such complaints and provide a written
notice to a payment card network or covered entity that
requires the alleged violator to remedy the violation no later
than 30 days after the recipient receives such notice. If the
recipient of a written notice does not remedy a violation
within 30 days, the Attorney General may bring an action in
Federal court to enjoin the violating behavior. This act does
not create a private right of action.
Section 2 establishes that any State or local government
law regulating the assignment, use, or disclosure of merchant
category codes that are used only or primarily for firearms
retailers is preempted. This section clarifies that nothing in
this Act may be construed to prevent a payment card network or
covered entity from complying with laws related to dispute
processing, fraud, compliance management, or protecting
transaction integrity from concerns related to illegal or
suspicious activities, data breaches, or cyber risks.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 1181 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report required under clause 3(e) of rule XIII of
the House of Representatives.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
MINORITY VIEWS
H.R. 1181 would prohibit payment card networks from using a
Merchant Category Code (``MCC'') that distinguishes firearms
retailers from general-merchandise retailers or sporting-goods
retailers, and would be enforced by the Department of Justice
(``DOJ''). The bill would also preempt state laws in this
regard.
Merchant Category Code is a four-digit number that credit
card networks use to classify businesses by their primary goods
or services to determine transaction fees and risk.\1\ The use
of MCC in purchases notes the type of store where a purchase is
made, but not the type of products that are bought within such
a store.\2\ Additionally, if a financial institution offers
cashback on purchases, the financial institution will use the
MCC to tell which purchases were made so the cashback reward
can be properly applied.\3\
---------------------------------------------------------------------------
\1\ Merchant category codes (MCCs): What they are and MCC code
lookup, Stripe (last accessed: Dec. 13, 2025).
\2\ America's Credit Unions, In the Crosshairs: Firearms Merchant
Category Code (Feb. 1, 2024).
\3\ Id.
---------------------------------------------------------------------------
In a letter opposing the bill, gun safety groups noted
that, ``Hundreds of these MCCs exist for nearly every type of
retailer, describing both entire industries and individual
companies. Florists, grocery stores, fast-food restaurants, art
dealers, automotive tire shops, and even candy stores have a
distinct code based on retailer categories, not on the items an
individual purchases. Algorithms have been designed to use
these codes to filter through millions of daily transactions
and identify key financial behaviors. This automated process
allows creditors to detect and, when appropriate, report
unprecedented purchasing activity at retailers that may
indicate criminal intent or activity--from suspected fraud to
violent crime. Originally developed for tax purposes, creditors
now use MCC data for a range of purposes, including activity
tracking, reporting, and risk management, while protecting the
privacy of consumers.'' \4\
---------------------------------------------------------------------------
\4\ See Letter from Brady, Community Justice, Everytown for Gun
Safety, GIFFORDS, Guns Down America, and Newtown Action Alliance to FSC
opposing H.R. 1181 (Dec. 15, 2025).
---------------------------------------------------------------------------
These codes are standardized by the International
Organization for Standardization (``ISO''), a non-governmental
organization based in Geneva, Switzerland.\5\ These standards
are typically adopted by the major credit card networks like
Visa, MasterCard, and American Express, as well as other P2P
platforms.\6\ In September 2022, the ISO issued standards that
created a MCC for firearm retailers.\7\ In response to that
designation, Republican members on FSC sent a letter to
Amalgamated Bank voicing their concerns that the MCC code puts
a burden on small retailers and would amount to flagging every
firearm specific transaction as suspicious.\8\
---------------------------------------------------------------------------
\5\ Id.
\6\ Id.
\7\ Ross Kerber, Global standards body approves new merchant code
for gun sellers, Reuters (Sept. 9, 2022).
\8\ Letter from Ranking Member Patrick McHenry to Amalgamated Bank
(Sept. 20, 2022).
---------------------------------------------------------------------------
In September 2023, California passed a law that would
require use of the firearms MCC by May 2025.\9\ Groups like the
Brady Campaign, Everytown for Gun Safety, and Women for
American Values and Ethics were listed as supporting the
California legislation.\10\ Additionally, Guns Down America
applauded the implementation of the legislation in
California.\11\ A senior official from the Brady Campaign
stated, ``By categorizing firearm and ammunition retailers
distinctly, financial institutions have a critical tool to
identify and flag dangerous activity, potentially preventing
gun trafficking and mass shooting tragedies before they
occur.''\12\ Colardo and New York have also enacted similar
laws.\13\ On the other hand, Florida, Texas, and other states
have passed legislation that would prohibit the use of the MCC
to track firearm purchases.\14\ Then in March 2024, a group of
more than 30 Democratic Members sent a letter to the Treasury
Department and Federal banking agencies, urging Treasury to
issue guidance directing payment card networks and financial
institutions to implement the new MCC for firearm and
ammunition retailers,\15\ though such a step was not taken.
---------------------------------------------------------------------------
\9\ Assembly Bill No. 1587 (Sept. 26, 2023).
\10\ Senate Judiciary Committee, AB 1587 (Jul. 6, 2023).
\11\ Guns Down America, California Implements First Merchant
Category Code for Firearm Dealers (Jul. 4, 2024). Also see SB 24-066
(2024).
\12\ Id.
\13\ See SB 24-066 (2024); Governor Kathy Hochul, Safer Street:
Governor Hochul Signs Legislation Strengthening New York's Gun Safety
Laws and Announces 53% Decline in Shootings (Apr. 3, 2025).
\14\ CS/SB 214-Sales of Firearms and Ammunition (last accessed,
Dec. 13, 2025). Also see Banking Dive, States split over gun merchant
category code (Oct. 2, 2023).
\15\ Letter from Senator Elizabeth Warren and Representative
Madeleine Dean to Treasury (Mar. 27, 2024).
---------------------------------------------------------------------------
H.R. 1181 would prohibit payment card networks from using a
MCC to distinguish firearm retailers from other retailers and
would be enforced by the DOJ. This Federal prohibition would
preempt state laws, including California, Colorado, and New
York, that require such MCC reporting, which proponents argue
could help track suspicious purchases to prevent gun violence.
H.R. 1181 is strongly opposed by Americans for Financial
Reform, Brady, Community Justice, Everytown for Gun Safety,
GIFFORDS, Guns Down America, and Newtown Action Alliance. They
wrote, ``It is incomprehensible that Congress would choose to
deny law enforcement a critical tool to prevent crime and mass
violence before it happens, and to undermine state-led efforts
to protect their constituents. Prohibiting the use of MCCs
would prevent law enforcement and financial regulators from
obtaining critical information that could help prevent gun
violence and other crimes. For these reasons, we urge Members
to oppose H.R. 1181.''
For these reasons, we oppose H.R. 1181.
Sincerely,
Maxine Waters,
Ranking Member.
Al Green,
Bill Foster,
Joyce Beatty,
Ayanna Pressley,
Rashida Tlaib,
Sylvia R. Garcia,
Nikema Williams,
Members of Congress.
[all]