California’s new law, which came into effect on July 1, requires credit card companies to track sales of firearms and ammunition.
The law mandates banks and credit card companies to establish specific category codes for businesses in California to track the sales of firearms, firearm accessories, and ammunition, especially those with the highest sales volume. Firearm retailers are required to integrate these codes into their sales systems by May 2025.
The bill’s drafter, State Assemblyman Philip Ting, explained that these codes will enable banks and credit card companies to flag suspicious purchasing behaviors.
“Financial institutions can now join our firearms tracking efforts because they can detect purchasing patterns that others may not be able to identify,” he said in a press release on June 25. “Promptly notifying authorities when there is significant stockpiling of firearms and ammunition is crucial for preventing tragedies and saving lives.”
Last year, the SB1587 bill was passed, requiring the use of four-digit codes in firearm sales, similar to how tracking codes are used in the travel, hospitality, grocery, and other retail sectors.
The national gun control group Guns Down America advocates for a significant reduction in the number of firearms in the U.S. and making them more difficult to purchase. The organization has been instrumental in pushing for new state and federal firearm laws, including the establishment of sales tracking codes.
Colorado and New York have also passed similar firearm code laws, which will take effect in May 2025.
“Guns Down America’s Executive Director, Hudson Munoz, stated in February that “the firearm industry should not be exempt from the rules and standards that are widely applicable to other industries, whether it’s a grocery store or a church.” Establishing merchant category codes for gun store businesses would only bring benefits to the financial industry, consumers, and especially public safety and well-being.”
However, gun rights organizations oppose the use of merchant codes to track firearm purchases.
The National Rifle Association (NRA) critiqued this practice as “highly dangerous,” fearing that states would use these codes to bolster firearm regulation.
“Collecting financial transaction data of firearms retailers is akin to monitoring and registering law-abiding gun owners,” the NRA stated in an online article in July 2023. “Advocates of this plan support firearms and gun owner registration and oppose the privacy rights of gun owners.”
The NRA mentioned that following California Governor Gavin Newsom’s signing of the new law in September 2023, they have initiated exploring legal challenges. It remains unclear if the NRA has filed any legal actions against the measure.
The California Rifle and Pistol Association (CRPA), with tens of thousands of members, has long opposed this legislation, arguing that merchant codes will not provide any additional information to the government to address criminal issues.
According to legislative analysis, the association’s comments on the SB1587 proposal in 2023 pointed out that the Department of Justice “will not gain any new data from firearm and ammunition purchases, as this data is already understood under current conditions.” “Considering that the merchant codes will not provide extra information to help solve crimes, the true purpose of the bill seems to put law-abiding citizens at risk.”
CRPA further noted that the new system could inadvertently affect parents. The association gave an example, “Imagine a parent buying shotgun ammunition to support their child participating in competitive shooting at a shooting range, only to be subject to unwarranted investigation by Department of Justice personnel because there is no illegal activity.”
At the same time, some states take an opposite stance to California, with 14 states including Georgia, Tennessee, and Iowa having enacted legislation prohibiting the use of such tracking codes in firearm shops.