Sen. Matt Harrington (R-York) presented a bill on Thursday that would prevent Maine from using financial institutions’ merchant category codes (MCCs) to track and potentially freeze purchases at firearm dealers.
“If a firearm-specific MCC were to be put into place, any large purchase could be flagged as suspicious by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCen); and transactions could be denied,” said Sen. Harrington during his testimony.
“Lawful transactions made by law-abiding gun owners could be reported to law enforcement. Gun owner watchlists could be created and shared with the federal government, which is especially troubling as the federal government, as you are likely aware, is prohibited from keeping a list of gun owners,” he added.
The bill, LD 1867, drew support from three Republican co-sponsors, all senators, including Senate Minority Leader Trey Stewart (R-Aroostook).
Financial institutions use MCCs to categorize purchases based on the type of retailer at which they are made. Typically, institutions categorize firearms dealers under general retail or sporting goods MCCs, but some anti-gun activists have begun to push for distinct MCCs for firearms dealers.
Those codes would allow banks to track large or allegedly “suspicious” purchases made at gun dealers. That information could be shared with states or law enforcement, or could be used to create a rudimentary database of gun owners.
The system would not be flawless, as it would only allow the banks to see how much was spent at a dealer, without showing what was purchased.
“An individual who buys $5,000 in outdoor supplies from Kittery Trading Post or L.L. Bean, such as a canoe, life preservers, tents, etc, could be flagged as an extremist as they made a sizable purchase at a retailer that had a firearm MCC code. This issue further ensnares law-abiding citizens and could land non-gun owners on government watchlists,” said Harrington.
The senator’s bill would prevent any financial institution from requiring the use of a firearm dealer-specific MCC. It also prevents banks from taking any adverse action against firearms dealers based on their use or failure to use a new, specific MCC.
The Attorney General will be instructed to pursue an injunction against anyone who violates the new law. If a violation continues 30 days after the perpetrator is served with the injunction, the court will impose a fine of up to $10,000 per violation.
Some states, including New York and California, have already passed laws requiring unique MCCs for gun dealers, while 19 others, including neighboring New Hampshire, have banned the practice with laws similar to Harrington’s proposal.
During the public hearing, Harrington proposed an amendment to the bill that, while keeping the effect of the bill largely the same, would replace the draft text with the text used in New Hampshire’s successful law.
U.S. Rep. Chellie Pingree (D-Maine) has been vocal in her support for a new firearm-dealer-specific MCC, urging banks to implement an MCC created in 2022 by the International Organization for Standardization (ISO).
During the public hearing, a former law enforcement officer and current firearms dealer, Robert Rodd Jr. of Greenbush, testified in favor of the bill, explaining that unique MCCs could allow banks to prevent card purchases from being made at gun stores.
“What the Firearm Retailer MCC does enable is allowing the financial institution issuing a credit card, or the credit card companies themselves – Visa, MasterCard, American Express, etc., to deny purchases made with their cards at these establishments at their own discretion. This can be done with no warning to the purchaser or retailer,” said Rodd.
“Imagine going to your local gun store and trying to pay with your credit card only to have it denied because your local or national bank or credit card company has decided they don’t want their card to be used for “firearms” anymore,” he added.
