HR1181-119

What This Bill Does

The Protecting Privacy in Purchases Act prohibits payment card networks from requiring firearms retailers to use a merchant category code that distinguishes them from general-merchandise or sporting-goods retailers. It also bars covered payment entities or their agents from assigning such a code to a firearms retailer. The Attorney General must enforce the rule, create a complaint process within 90 days for individuals including firearms retailers, investigate complaints, send written violation notices requiring payment card networks or covered entities to cure within 30 days, and may bring a federal court action to enjoin violations that are not cured. The bill creates no private right of action. It preempts state and local laws regulating merchant category codes for firearm retailers, while later text preserves compliance with laws related to dispute processing, fraud, compliance management, or transaction integrity. The Attorney General must report annually to Congress on investigations, case summaries and dispositions, and available effectiveness data.

Who Benefits and How

Firearms retailers benefit because payment networks and processors could not single them out with a firearm-specific merchant category code. Gun purchasers and privacy advocates benefit if card transactions are less easily categorized as firearm-related through MCC data. Payment card networks benefit from a single federal rule preempting state and local firearm MCC laws, although they also face enforcement duties. General-merchandise and sporting-goods comparison categories benefit because firearms retailers must be treated like those merchant categories for MCC purposes. Firearms retailers also benefit from a complaint process at DOJ.

Who Bears the Burden and How

Payment card networks, merchant acquirers, processors, and other covered entities must avoid requiring or assigning firearm-specific MCCs and cure violations within 30 days after DOJ notice. The Attorney General must build the complaint process, investigate complaints, issue notices, seek injunctions when needed, and report annually to Congress. States and local governments bear preemption of laws regulating firearm-retailer MCC assignment, use, or disclosure. Financial institutions and fraud-compliance teams must distinguish barred firearm-retailer MCC practices from preserved transaction-integrity, fraud, and compliance management obligations.

Key Provisions

• Prohibits payment card networks from requiring firearm-specific merchant category codes.
• Bars covered entities or agents from assigning firearm-specific merchant category codes to firearms retailers.
• Requires the Attorney General to establish a complaint process within 90 days.
• Requires DOJ investigations, written violation notices, and 30-day cure periods.
• Authorizes federal injunction actions for uncured violations.
• Preempts state and local firearm-retailer MCC laws.
• Provides no private right of action.
• Requires annual congressional reports on investigations, dispositions, and effectiveness.