Hochul Signs Bill Expanding Use of Merchant Category Codes for Gun, Ammo Sales

New York Gov. Kathy Hochul signed three new gun control measures into law this week, including a bill that expands the existing requirement for merchant category codes for sales at gun shops. 

On the surface, S745/A439 doesn’t appear to make any significant change at all. It removes a definition of someone who deals in ammunition as “any person who engages in the business of purchasing, selling, or keeping ammunition” in the state, but keeps the definition of a “dealer of firearms”, which includes “a gunsmith or dealers in firearms in this state licensed pursuant to section 400.00 of the penal law, for which the highest sales value is, or is expected to be, from the combined sale in New York of firearms, firearm accessories, or ammunition, as stated by the business to its merchant acquirer in the ordinary course of business.”

According to the governor’s office, however, the new law will expand the use of MCC’s in the state. 

Legislation S.745/A.439 will strengthen the law that the Governor signed last year that requires credit and debit card issuers to use the merchant category code (MCC) for firearms and ammunition retailers by ensuring that it captures retailers whose bulk sales come from firearms, ammunition and firearms accessories.

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Assemblymember Michaelle Solages said, “With today’s signing, Governor Hochul is taking a bold step to protect New Yorkers from gun violence. By requiring the use of merchant category codes for firearm and ammunition purchases, we are equipping financial institutions with a critical tool to help detect suspicious activity before it becomes a tragedy. This is a smart, data-driven approach to public safety, and I’m proud to lead the way with Senator Myrie and dedicated advocates.”

Executives at credit card companies like Visa and Mastercard have already dismissed the idea that these merchant category codes can be used to detect “suspicious activity”. MCC’s don’t allow financial institutions to peek into the shopping carts of customers, so they can’t tell what was purchased at a particular store, only how much was spent and when. There’s no bright line for the companies to follow when it comes to identifying a “suspicious” transaction, which is supposed to be reported to the U.S. Treasury Department, and including businesses that deal in bulk sales of firearms and ammunition is only going to raise the potential for customers to be falsely flagged as a threat if they purchase a significant amount of ammunition or firearms at any one time. 

A high school trap coach, for example, who purchases several thousand rounds of shotgun shells for their team could easily end up on the receiving end of a Treasury investigation, while someone intent on committing mass murder who purchases a couple hundred rounds of 9mm or .223 would likely fly under the radar. Purchasing large amounts of ammunition or multiple firearms at one time isn’t and shouldn’t be seen as evidence that a crime is about to be committed, but by expanding the use of these MCCs Hochul is basically guaranteeing that the feds are going to spend a lot of time on wild goose chases and investigating lawful gun owners who have no intent of criminal activity whatsoever. 

The other bills signed by Hochul also expand on existing gun control laws already on the books in New York. S.744/A.436 adds the phrase “pistol converters” to the list of “rapid-fire modification devices” that are banned by the state, even though existing statute covers any item that “is designed to accelerate the rate of fire of a semi-automatic firearm, rifle or shotgun”, while S.743/A.437 changes the Surgeon General-style warning that gun dealers must post at their stores. 

Currently, the law mandates that the signage reads: ACCESS TO A WEAPON OR FIREARM IN THE HOME SIGNIFICANTLY INCREASES THE 16 RISK OF SUICIDE, DEATH DURING DOMESTIC DISPUTES, AND/OR UNINTENTIONAL DEATHS TO CHILDREN, HOUSEHOLD MEMBERS AND OTHERS. 

S.743/A.437 replaces the word “WEAPON” with “RIFLE, SHOTGUN”, which is hardly an earth-shattering advance in gun control legislation. Still, anti-gun legislators want to be able to say they did “something”, and now they can. 

Though Hochul was sure to pat herself on the back and proclaim these laws will make New York a saferplace, I’d argue that two of the bills are completely duplicative of existing statute, while S.745/A.439’s primary impact is going to be on lawful gun owners, financial companies, and the Treasury agents who’ll be wasting time and taxpayer dollars investigating “suspicious” activity based on nothing more than the dollar amount spent at a particular store. Hardly anything to celebrate, but Hochul and the anti-gun legislators who ran these bills are still intent on taking a victory lap over their latest attempt to signal their hostility towards a fundamental civil right.