NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9862A
SPONSOR: Solages TITLE OF BILL:
An act to amend the general business law, in relation to requiring
payment card networks to use certain merchant category-codes for firearm
merchants
PURPOSE:
To create a new merchant category code for gun and ammunition retail
businesses and dealers to enable financial institutions to monitor
suspicious purchasing patterns.
SUMMARY:
Section 1. Amends the real property law by adding a new article 29-BBB.
Section 2. Sets the effective date.
JUSTIFICATION::
Nearly 45,000 Americans were killed with guns in 2021, and the country
experiences gun violence at rates exceptionally higher than our peer
nations. Since 2009, there have been 279 mass shootings resulting in
more than 1,500 gun deaths; meanwhile, the shooters in some of the worst
mass shootings in recent memory used credit cards to make their arsenal
purchases. For example, in a matter of six weeks, the shooter who killed
12 people at an Aurora movie theater charged $11,000 worth of guns,
ammunition, and body armor-to a Mastercard. Similarly, the killer who
massacred 60 people on the Las Vegas strip used credit cards to purchase
guns and ammunition totaling nearly $100,000 in the 12 months before the
attack. The Pulse nightclub shooter racked up $26,000 in credit card
charges on guns and ammunition in less than two weeks preceding the
carnage that killed 49 people and wounded 53. As a precautionary meas-
ure, the shooter searched online to learn whether his "unusual spending"
pattern could be detected by the credit card companies and flagged for
law enforcement. After being reassured that he need not worry about
detection, he completed his purchases and irrevocably damaged countless
families and the Orlando community as a whole.
Reporting from the Wall Street Journal in April 2018 explained how banks
and credit card companies could help law enforcement preempt some mass
shootings by identifying suspicious gun purchases through the implemen-
tation of a new MCC. Later that year, a Dealbook investigation into the
financing of mass shootings continued and accelerated. MCCs are four-
digit codes maintained by the International Organization for Standardi-
zation (ISO), which classify merchants by the nature of their busi-
nesses. Financial institutions and payment networks, including
MasterCard and American Express, use the ISO standard to assign MCCs to
merchants in order to determine interchange rates, assess transaction
risks, and generally categorize payments. Currently, unique MCCs exist
for "wig and toupee shops" and "electric razor shops," but none exist
for firearms dealers.
The creation of a new MCC for gun and ammunition retail stores would be
the first step towards facilitating the collection of valuable financial
data that could help law enforcement in countering the financing of
terrorism efforts. A new MCC code could make it easier for financial
institutions to monitor certain types of suspicious activities including
straw purchases and unlawful bulk purchases that could be used in the
commission of domestic terrorist acts or gun trafficking schemes. Such
coordination between financial institutions and law enforcement has been
instrumental in efforts across the Federal government to identify and
prevent illicit activity.
RACIAL JUSTICE IMPACT:
Communities of color are disproportionately impacted by gun violence
1. Gun violence in Black communities is a direct consequence of
systemic disadvantages that are prevalent in Black communities today.
Research shows that high rates of gun violence seen today have been
forged by past and present racial discrimination, including historic
racial segregation and disinvestment
2. As gun violence plagues these
communities, it is important that New York takes the initiative to
eradicate these present realities by implementing this legislation.
GENDER JUSTICE IMPACT:
TBD.
LEGISLATIVE HISTORY::
New bill.
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE::
This act shall take effect immediately.
1https://everytownresearch.org/issue/impact-of-gun-violence-on-historic
ally-marginalized-communities/
2https://giffords.orememo/gun-violence-in-black-communities/
STATE OF NEW YORK
________________________________________________________________________
9862--A
IN ASSEMBLY
April 24, 2024
___________
Introduced by M. of A. SOLAGES, SIMON, THIELE, DARLING, L. ROSENTHAL,
SIMONE, CUNNINGHAM, SAYEGH, STECK, K. BROWN -- read once and referred
to the Committee on Consumer Affairs and Protection -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the general business law, in relation to requiring
payment card networks to use certain merchant category-codes for
firearm merchants
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The general business law is amended by adding a new article
2 29-BBB to read as follows:
3 ARTICLE 29-BBB
4 CREDIT AND DEBIT CARDS
5 Section 529. Definitions.
6 529-a. Merchant category-codes.
7 § 529. Definitions. For the purposes of this article, the following
8 terms shall have the following meanings:
9 1. "Merchant acquirer" means an entity that establishes a relationship
10 with a merchant for the purposes of processing credit, debit, or prepaid
11 transactions.
12 2. "Payment card network" means an entity that provides services that
13 route transactions between participants on the network to conduct debit,
14 credit, or prepaid transactions for the purpose of authorization, clear-
15 ance, or settlement.
16 3. "Person" includes an individual, corporation, partnership or asso-
17 ciation, two or more persons having a joint or common interest or any
18 other legal or commercial entity.
19 4. "Issuer" means a person who issues a credit card or a debit card.
20 § 529-a. Merchant category-codes. 1. For the purposes of this section,
21 the following terms shall have the following meanings:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13704-03-4
A. 9862--A 2
1 (a) "Dealer of ammunition" means any person who engages in the busi-
2 ness of purchasing, selling or keeping ammunition in this state.
3 (b) "Dealer of firearms" means a gunsmith or dealers in firearms in
4 this state licensed pursuant to section 400.00 of the penal law, for
5 which the highest sales value is, or is expected to be, from the
6 combined sale in New York of firearms, firearm accessories, or ammuni-
7 tion, as stated by the business to its merchant acquirer in the ordinary
8 course of business.
9 (c) "Firearm" has the same meaning as that term is defined in subdivi-
10 sion three of section 265.00 of the penal law.
11 2. (a) On or before November first, two thousand twenty-four, each
12 payment card network shall make the merchant category-code for firearms
13 and ammunition businesses established by the international organization
14 for standardization on September ninth, two thousand twenty-two, avail-
15 able for merchant acquirers that provide payment services for dealers of
16 ammunition or dealers of firearms.
17 (b) On and after May first, two thousand twenty-five, each merchant
18 acquirer shall assign to each dealer of ammunition and dealer of
19 firearms in this state the merchant category-code for firearms and ammu-
20 nition businesses established by the international organization for
21 standardization on September ninth, two thousand twenty-two.
22 3. Whenever there shall be a violation of this section, the attorney
23 general shall give written notice to the person violating this section
24 identifying the specific provisions of this section that are or were
25 being violated. The attorney general shall not bring an action under
26 this section where, within thirty days of receiving such written notice,
27 the person cures the violation and provides the attorney general with a
28 written statement confirming the violation was cured, including support-
29 ing documentation on how the violation was cured, and stating how inter-
30 nal policies were changed to prevent such violations in the future. If
31 the violations were not cured or proper written notice not received by
32 the attorney general within thirty days of written notice being received
33 by such person violating this section, an application may be made by the
34 attorney general in the name of the people of the state of New York to a
35 court or justice having jurisdiction by a special proceeding to issue an
36 injunction, and upon notice to the defendant of not less than five days,
37 to enjoin and restrain the continuance of such violations; and if it
38 shall appear to the satisfaction of the court or justice that the
39 defendant has, in fact, violated this section, an injunction may be
40 issued by such court or justice, enjoining and restraining any further
41 violation, without requiring proof that any person has, in fact, been
42 injured or damaged thereby. In any such proceeding, the court may make
43 allowances to the attorney general as provided in paragraph six of
44 subdivision (a) of section eighty-three hundred three of the civil prac-
45 tice law and rules, and direct restitution. Whenever the court shall
46 determine that a violation of this section has occurred, the court may
47 impose a civil penalty of not more than ten thousand dollars for each
48 violation and reasonable attorney's fees and costs incurred in investi-
49 gating and bringing an action under this section. In connection with any
50 such proposed application, the attorney general is authorized to take
51 proof and make a determination of the relevant facts and to issue
52 subpoenas in accordance with the civil practice law and rules.
53 § 2. This act shall take effect immediately.
