Financial institutions will likely be expected to monitor for suspicious firearms transactions
In the near future, credit cards will use a controversial new “merchant category code” specifically for retailers who specialize in firearms. Advocates of the new code believe it will help financial institutions curb their role in facilitating the purchase of weapons used in mass shootings.
Credit cards have long used standardized merchant category codes to identify specialty merchants, but they and the firearms industry have resisted coding specific to firearms retailers. According to Wall Street Journal reporting, until now gun shops have been coded under the broad categories of specialty retailers or durable-goods sellers. Big-box stores that still sell weapons will not be affected by the code change due to the broadness of their merchandise sales.
The companies that run the card networks have pledged to support consumer privacy related to lawful purchases of firearms using credit cards. Advocates believe the new code should help financial institutions using card networks to flag suspicious purchases, though the traits and processes of suspected suspicious activity have not yet been formalized.
Efforts to boost the tracking of suspicious gun purchases in the U.S. have gained greater traction as the frequency of mass shootings has continued to rise. However, pushback to any financial institution monitoring weapons sales and purchases remains substantial. Initial perceptions are that obligations to monitor for risk of suspicious sales would be similar to AML Compliance monitoring processes.
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