State Rep. Shane Stringer (R-Citronelle) has filed legislation to prohibit financial institutions from collecting financial transaction data specific to firearms and ammunition.

House Bill 389 (HB389) follows the pattern of several states that have passed similar legislation to address the recent implementation of Merchant Category Codes (MCCs) for gun and ammunition purchases.

In September 2023, the International Organization for Standardization approved specific MCCs for firearms stores. Payment processors and other financial service companies use MCCs to categorize transactions.

Gun rights advocates have opposed the use of firearm-specific MCCs since the stated purpose is to collect and report suspicious gun activity and even develop algorithms to report activity to law enforcement. Data collection on gun owners and their purchases leads many to fear potential discrimination or reprisal when purchasing firearms. Additional concerns exist for the collection of a compulsory de facto gun database that could be used to track or persecute gun owners.

The bill would prohibit financial institutions or payment processors from assigning or requiring a merchant to use a firearms code in a way that distinguishes a firearms retailer physically located in Alabama from general merchandise retailers or sporting goods retailers. It would also prohibit financial institutions from declining to process lawful payments based on the assignment of gun-specific MCCs.

The bill would also prevent any state agency from keeping a record or registry of privately owned firearms their owners, except in the regular course of a criminal investigation and prosecution or as required by state law.

"An individual or entity involved in facilitating or processing an electronic payment transaction and licensed to do business in this state, including, but not limited to, a financial institution, payment card issuer, or payment card network, shall not assign to a merchant or require a merchant to use a firearms code in a way that distinguishes a firearms retailer physically located in the State of Alabama from general merchandise retailers or sporting goods retailers," the bill reads.

The bill also contains a provision allowing the attorney general to investigate or prosecute any institution that violates the bill's provisions.

Several states have enacted similar legislation, including Texas, Florida and Mississippi, all of which have been supported by the National Rifle Association (NRA).

"Collecting firearm retailer financial transaction data amounts to surveillance and registration of law-abiding gun owners," The NRA said in a release on  HB389. "Those promoting this scheme are in favor of firearm and gun owner registrations. Therefore, it should be assumed that the goal of this program is to share all collected firearm retailer MCC data with government authorities and potentially private third parties that may include gun control organizations and anti-gun researchers."

Stringer was also responsible for passing the state's permitless carry legislation in 2022, which allowed lawful Alabamians to carry a pistol on their person or in their vehicle without first acquiring a permit.

Stringer's actions in passing the permitless carry legislation earned him the NRA's Association Institute for Legislative Action Defender of Freedom Award.

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