Buying a rifle, ammunition, or gun safe should not place an American under special financial surveillance. Yet that is the premise behind the firearm-retailer merchant code that banks and gun-control activists have spent years trying to impose on lawful gun owners.
On July 14, the House passed H.R. 1181, the Protecting Privacy in Purchases Act, by a 221–201 vote. Five Democrats and one independent joined 215 Republicans in supporting the measure, while 200 Democrats and Republican Rep. Brian Fitzpatrick voted against it. NRA-ILA supported the legislation, which now moves to the Senate.
Rep. Riley Moore (R-W.Va.) sponsored the bill.
A Financial Label Created Specifically for Gun Stores
Merchant category codes are four-digit identifiers used to classify businesses. Gun stores were historically categorized alongside sporting-goods or general-merchandise retailers.
That changed in 2022 after banks and gun-control activists pushed the International Organization for Standardization to approve a separate code for firearm and ammunition retailers. The result was MCC 5723, a financial label for businesses whose primary sales involve firearms, ammunition, or related products.
The code does not reveal what a customer purchased. It generally identifies the merchant category and transaction amount. That limitation does not make the system harmless. It makes it indiscriminate.
A $2,000 gun-store charge could represent a rifle. It could also cover a safe, optic, training class, range membership, hunting equipment, or ammunition. MCC 5723 cannot tell the difference. It simply places every qualifying transaction into a gun-related category that can be searched, analyzed, and flagged.
“The implementation of Merchant Category Codes to surveil lawful purchases is nothing more than an ill-conceived attempt to create a de facto national firearms registry,” NRA-ILA Executive Director John Commerford warned.
What H.R. 1181 Would Do
The House-passed bill goes beyond credit cards. Its definitions cover entities involved in processing credit, debit, and prepaid-card transactions.
Payment networks could not require gun retailers to use a code that identifies them as sellers of firearms, ammunition, firearm accessories, or components. Banks and other covered entities would likewise be barred from assigning such a code.
The bill would also preempt state and local laws regulating firearm-retailer MCCs. That provision would override mandates imposed by California, Colorado and New York while replacing the current patchwork of state requirements with a nationwide prohibition.
Importantly, H.R. 1181 does not prevent financial institutions from complying with laws concerning fraud, genuinely suspicious or illegal activity, data breaches, or transaction security. Banks could continue investigating evidence of actual crime. They could not begin with the assumption that patronizing a gun store is inherently suspicious.
Enforcement Comes With Limitations
The attorney general would have 90 days after enactment to establish a complaint process for individuals and firearm retailers. DOJ would be required to investigate submitted complaints.
If DOJ determines that a payment network or processor violated the law, the company would receive notice and 30 days to correct the violation. If it refused, the attorney general could seek a federal injunction.
The bill creates no private right of action and specifies no civil fine. A gun dealer improperly tagged with the code could file a complaint but could not sue under H.R. 1181 for damages.
That is a weakness, particularly if a future anti-gun attorney general controls enforcement. Nevertheless, the legislation establishes a clear federal prohibition and requires annual reports to Congress detailing investigations and outcomes.
Most House Democrats Voted to Preserve the Tracking Tool
Opponents claim the code could help banks identify gun trafficking or prevent mass shootings. That argument exposes the fundamental problem.
Because MCC 5723 does not disclose what was purchased, any determination of “suspicious” behavior would rest largely on where someone shopped and how much was spent, not evidence that a crime occurred.
That is financial profiling directed at the exercise of a constitutional right.
Law enforcement already has subpoenas, warrants, suspicious-activity reports and other investigative tools for cases supported by evidence. It does not need a dragnet treating lawful gun-store customers as potential criminals. The Second Amendment is not probable cause.
The official House vote shows opposition to this surveillance crossed party lines, but only narrowly. Five Democrats broke with their party to protect gun-owner privacy. Two hundred voted to leave the tracking mechanism available.
The Senate Is the Next Test
House passage is an important victory, but H.R. 1181 is not law. The Senate companion, S. 1715, remains before the Banking, Housing, and Urban Affairs Committee.
Should a lawful purchase from a constitutionally protected industry place an American into a specially marked financial category?
The answer should be no. Buying guns and ammunition is lawful commerce, not grounds for a bank-generated watchlist. H.R. 1181 would finally tell financial institutions and anti-gun states that gun owners are citizens, not suspects.
About Duncan Johnson:
Duncan Johnson is a lifelong firearms enthusiast and unwavering defender of the Second Amendment—where “shall not be infringed” means exactly what it says. A graduate of George Mason University, he enjoys competing in local USPSA and multi-gun competitions whenever he’s not covering the latest in gun rights and firearm policy. Duncan is a regular contributor to AmmoLand News and serves as part of the editorial team responsible for AmmoLand’s daily gun-rights reporting and industry coverage.
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