Tennessee Blocks Financial Tracking of Gun Purchases with New Act

Clear Facts

• Tennessee’s Republican Governor Bill Lee has signed into law House Bill 2762, also known as the “Second Amendment Financial Privacy Act,” which prohibits financial institutions from monitoring gun and ammunition purchases.
• The legislation, introduced by Republican State Rep. Rusty Grills, counters plans by credit card companies Visa and Mastercard to categorize firearm and ammunition purchases separately in 2022.
• The bill also prevents financial institutions from declining credit card transactions based on firearms merchant category code, and bans government entities from maintaining a registry of privately owned firearms or gun owners in the state.

Tennessee Governor Bill Lee earlier this week signed into law a measure that prevents financial institutions from conducting unauthorized surveillance of gun purchases. This action comes in response to growing concerns about the potential tracking of gun and ammunition purchases by entities such as banks and credit card companies.

The enacted legislation, House Bill 2762 or the “Second Amendment Financial Privacy Act,” ensures that financial institutions cannot compel gun sellers to use a specific merchant code that distinguishes firearms retailers from general merchandise or sporting goods retailers. These merchant codes are used by banks and credit card companies for tracking sales trends and safeguarding against fraudulent activities.

“State Rep. Rusty Grills, a Republican, unveiled the legislation earlier this year following the announcement by credit card companies Visa and Mastercard about their plans to separately categorize firearm and ammunition purchases in 2022.”

Besides, the “Second Amendment Financial Privacy Act” restricts financial institutions from declining credit card transactions merely based on the assignment or non-assignment of a firearms merchant category code. It also bans government entities from maintaining a registry of privately owned firearms or gun owners in Tennessee.

The lawmaker behind the legislation, Grills, emphasized his goal was to “safeguard the Second Amendment rights of all those in Tennessee” from financial institutions that may create “a database” of gun buyers.

“Grills highlighted that this new law will preempt any potential future efforts by institutions to interfere with Tennesseans’ Second Amendment rights.”

Grills underscored the importance of proactive rights protection, stating, “We would rather be able to protect our rights from the beginning rather than have to fight for our rights back at the end.”

The bill received approval from the state House and Senate before Governor Lee officially passed it earlier this week.

In 2022, the International Organization for Standardization (IOS), a body responsible for developing proprietary, industrial, and commercial standards, approved a distinctive merchant code explicitly for gun retailers. This action by IOS prompted credit card companies to segregate gun purchases from other categories. Around the same time, there was increased pressure from some lawmakers for card companies to “do more to help stop mass shootings.”

However, these card companies temporarily halted their plans to track gun purchases following warnings from Republican lawmakers and attorneys general about the constitutional implications of their proposal. Despite this, Visa, Mastercard, and American Express resumed their plan to potentially track gun purchases in California.

While some Republican-led state legislatures, including Tennessee, have banned the specific merchant code for gun retailers, others like California have mandated gun retailers to adopt the merchant code by May 2025.

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