Prohibits use of new merchant category code by credit card companies for purchases of firearms and ammunitions.

A1251

ASSEMBLY, No. 1251

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman MICHAEL INGANAMORT

District 24 (Morris, Sussex and Warren)

Assemblywoman DAWN FANTASIA

District 24 (Morris, Sussex and Warren)

SYNOPSIS

���� Prohibits use of new merchant category code by credit
card companies for purchases of firearms and ammunitions.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

concerning credit card purchases of firearms and ammunitions and supplementing
Title 2C of the New Jersey Statutes.

Whereas,
The International Organization for Standardization,
based in Switzerland, recently approved a new merchant category code for
firearms and ammunition merchants; and

Whereas,
Firearms and ammunition merchants historically have
been classified as sporting goods retailers or general merchandise retailers,
which has been sufficient for credit card companies� business needs; and

Whereas,
According to advocates for the new merchant
category code, the new code will allow credit card companies to flag
�suspicious� transactions, ostensibly for the purpose of predicting and
preventing future gun violence; and

Whereas,
Proponents indicate that the new merchant category
code is a �first step� but have given no guidance as to how to distinguish
suspicious activity from lawful sales; and

Whereas,
The use of the merchant category code cannot
distinguish the sale of a firearm from the sale of a gun safe by a firearms and
ammunition merchant; and

Whereas,
The use of the new merchant category code to detect
suspicious activities predicting future unlawful activity will likely
discourage financial institutions from serving lawful retailers of firearms and
ammunition and chill the lawful exercise of the Second Amendment rights; and

Whereas,
Current State and federal laws require a potential
firearms purchaser in New Jersey to undergo multiple criminal history and
mental health records checks and a vast permitting system before a licensed
retail dealer of firearms can deliver a firearm to the purchaser; and

Whereas,
The new merchant category code may result in credit
card companies reporting law-abiding citizens to a law enforcement agency based
on overly broad definitions of suspicious activity and the creation of a de
facto gun registry and of watchlists of law-abiding citizens; and

Whereas,
The use of the new merchant category code could
lead to banks and other financial institutions refusing to do business with
law-abiding gun owners and licensed firearm retail dealers; and

Whereas,
Developing regulation for the sale of firearms and
ammunition is not the role of unelected bankers and foreign organizations and
runs counter to the Second Amendment right to keep and bear arms and our
nation�s sovereignty; now, therefore,

���� Be It Enacted
by the Senate and General Assembly of the State of New
Jersey:

���� 1.��� The Legislature finds
and declares that:

���� a.���� The right of
individuals to keep and bear arms is guaranteed under the Second Amendment to
the United States Constitution;

���� b.��� Information acquired
from records showing the legal purchase of a firearm or of ammunition by a
law-abiding citizen using a credit card is not a law enforcement tool and can
become an instrument for profiling, harassing, or abusing law-abiding citizens
based on the choice to own a firearm and exercise rights under the Second
Amendment to keep and bear arms as guaranteed under the United States
Constitution.� Further, the information has the potential to fall into the
wrong hands and become a shopping list for thieves.

���� c.���� Information acquired
from records showing the legal purchase of a firearm or of ammunition by a
law-abiding citizen using a credit card is not a tool for fighting terrorism,
but rather is an instrument that can be used as a means to profile innocent
citizens and to harass and abuse American citizens based solely on their choice
to own firearms and exercise their Second Amendment right to keep and bear arms
as guaranteed under the United States Constitution.

���� d.��� The creation or
maintenance of records of purchases of firearms or ammunition or the tracking
of sales made by a licensed retail dealer of firearms or ammunition by a
nongovernmental entity, including a financial institution, without a
substantial and historical business need or a requirement imposed by law, may
frustrate the right to keep and bear arms and violate the reasonable privacy
rights of lawful purchasers of firearms or ammunition.

���� e.���� Law-abiding firearms
owners whose names have been illegally recorded as a result of purchasing
firearms or ammunition using a credit card are entitled to redress.

���� 2.��� As used in this act:

���� �Merchant category code� means
a specific identification number established by the International Organization
for Standardization that is used to identify a specific good or service
provided by a merchant.

���� 3.��� A payment settlement
entity, merchant acquiring entity, or third party settlement organization, as
those terms are defined pursuant to section 6050W of the Internal Revenue Code,
26 U.S.C. 6050W, shall not assign a merchant category code to, or otherwise
classify, a merchant that is a seller of firearms or ammunition separately from
general merchandise retailers or sporting goods retailers.

���� 4.��� a.� An entity involved
in facilitating or processing a payment card transaction, including, but not
limited to, a financial institution, an acquirer, a payment card network, or a
payment card issuer, shall not assign to or require a merchant to use a merchant
category code that classifies the merchant as a firearms or ammunition retailer
or places the merchant as a similar classification.� A merchant of firearms or
ammunition shall be assigned or shall use a merchant category code for general
merchandise retailers or sporting goods retailers.

���� b.��� Any agreement or
contractual provision between an entity required to comply with subsection a.
of this section and a merchant that is contrary to the stipulations of the
subsection shall be void.

���� 5.��� The Department of Law
and Public Safety shall investigate alleged violations of sections 3 and 4 of
this act and, upon finding of a violation, bring an administrative action
seeking to impose an administrative fine of not more than $10,000 for each
violation of sections 3 or 4 of this act.

���� 6.��� This act shall take
effect on the first day of the fourth month next after enactment.

STATEMENT

���� This bill prohibits the use of
a new merchant category code to designate when consumers purchase a firearm or
ammunition.� The bill defines �merchant category code� to mean a specific
identification number established by the International Organization for
Standardization that is used to identify a specific good or service provided by
a merchant.� Under the bill, a payment settlement entity, merchant acquiring
entity, or third party settlement organization, as those terms are defined
pursuant to the Internal Revenue Code, are prohibited from assigning a merchant
category code to, or otherwise classifying, a merchant that is a seller of
firearms or ammunition separately from general merchandise retailers or
sporting goods retailers.

���� Additionally, an entity
involved in facilitating or processing a payment card transaction, including,
but not limited to, a financial institution, an acquirer, a payment card
network, or a payment card issuer, is not to assign to or require a merchant to
use a merchant category code that classifies the merchant as a firearms or
ammunition retailer or places the merchant as a similar classification.� A
merchant of firearms or ammunition is to be assigned or is to use a merchant
category code for general merchandise retailers or sporting goods retailers.�
Any agreement or contractual provision between an entity required to comply
with the bill and a merchant that is contrary to the bill�s provisions is to be
considered void.�

���� Lastly, the Department of Law
and Public Safety is charged with investigating allegations of violations of
the bill.� The department is to bring, upon a finding of a violation, an
administrative action to impose an administrative fine of not more than $10,000
for each violation of the bill.��������������