By Ross Kerber
(Reuters) - U.S. Senator Elizabeth Warren and other Democratic lawmakers renewed calls for financial regulators to direct the use of a payment code for firearms retailers, citing conflicting new state laws on the matter, a March 27 letter seen by Reuters shows.
A total of 33 U.S. senators and representatives urged regulators including U.S. Treasury Secretary Janet Yellen to issue guidance for banks and payment networks to implement a new "merchant category code," or MCC, approved by an international standards body in 2022.
WHY IT'S IMPORTANT
New federal guidance could resolve what, if any, new information payment networks should collect from firearms retailers.
Payment card companies including Visa (NYSE:V) and Mastercard (NYSE:MA) have paused much of their work to implement the new code, citing regulatory uncertainty.
CONTEXT
Laws passed by U.S. Republicans in at least seven states limit the use of the new code over concerns that it could be used to infringe upon gun rights enshrined in the U.S. Constitution's Second Amendment. Meanwhile, California has passed a law to promote its use and a similar bill is pending in Colorado.
The new code will not show specific items purchased but will identify where a person shopped by adding gun stores to a list of hundreds of existing retail categories. Proponents say the codes would help banks to flag suspicious purchases to reduce gun violence.
KEY QUOTES
"The need for uniform, clear federal guidance on this interstate commerce issue is becoming increasingly clear as states adopt differing and confusing rules about the gun store MCC," states the letter sent late on Wednesday led by Warren, of Massachusetts, and by U.S. Representative Madeleine Dean, of Pennsylvania. Warren urged similar action a year ago.
A U.S. Treasury Department representative referred questions about the letter to independent regulators including the Office of the Comptroller of the Currency. An OCC representative declined to comment.