Visa, Mastercard and American Express are coming under increasing pressure from public officials in their home states of California and New York to better track gun purchases made on their networks. 

To that end, shareholder proposals were filed with Mastercard and American Express on behalf of the New York City Employees’ Retirement System, New York Teachers’ Retirement System and City of New York Board of Education Retirement System, the office of New York City Comptroller Brad Lander announced Tuesday.

The shareholder proposals requested the companies’ boards issue reports on their “oversight of management’s decision-making regarding any application” with the entity that sets merchant coding standards, the International Standards Organization (ISO), to establish a category code identifying gun and ammunition stores.

A spokesperson for the comptroller’s office said Visa’s deadline to file shareholder proposals in advance of the company’s next annual meeting in 2023 had already passed.

Along with the California State Teachers’ Retirement System, those NYC pension funds also sent a letter to Visa, Mastercard and American Express voicing support for the creation of a gun seller merchant code and asking the companies to be transparent in their decision-making regarding the application before ISO.

At a Tuesday press conference, New York City Mayor Eric Adams, New York Attorney General Letitia James, a representative of Amalgamated Bank, gun safety advocates and other elected officials urged the card companies to not block the creation of a unique merchant category code that would flag gun sellers.

Together, the three NYC pension funds “own 667,200 thousand shares in American Express valued at approximately $92.49 million; 1.1 million shares in Mastercard valued at approximately $347.59 million; and 1.85 million shares in Visa valued at approximately $363.86 million,” a subsequent release noted.

Card companies respond

A merchant category code (MCC) is a four-digit number used to identify a merchant by the type of services or goods they sell. Geneva, Switzerland-based ISO sets international standards by voting that includes the credit card companies, Lander said during the press conference in New York City.

Although almost every type of business has a unique MCC, gun and ammunition stores do not, CBS News has reported. About 6,000 gun and ammunition stores in the U.S. are currently categorized as “miscellaneous,” Lander said Tuesday.

Seth Eisen, Mastercard’s senior vice president for communications, said the matter is currently being considered by ISO, but he wouldn’t comment on the meeting’s timing or ISO’s process. Eisen also wouldn’t say who Mastercard’s representatives are with ISO, or address the assertion that the company hasn’t supported creation of such a code previously. 

“As we do with other [merchant category code] proposals and related topics, we are reviewing how it could be implemented and managed by the banks that connect merchants to our network,” Eisen said in an email. “This will help us continue to deliver a payments system that supports all legal purchases while protecting the privacy and decisions of individual cardholders.”

Visa and American Express did not respond to multiple requests for comment. 

ISO at center of coding controversy

Creating such a code for gun merchants would allow financial institutions to take note of and report any suspicious gun purchasing activity, the comptroller’s office said in the release. ISO is set to meet this fall, and that’s what prompted the filing of these proposals and the call to action now, the spokesperson said. 

ISO did not respond to multiple messages and emails seeking comment.

Amalgamated Bank last year brought a proposal before ISO to create an MCC for gun sellers and has done so again this year, Lander said. “Unfortunately, Mastercard, American Express and Visa have failed to support this simple, practical, life-saving tool, and the time has come for them to do so,” Lander said Tuesday.

If there was an MCC for gun sellers, banks and credit card companies could use existing reporting systems to flag potentially troublesome sales, Amalgamated Bank First Vice President Maura Keaney said during Tuesday’s press conference. Keaney said ISO has not publicly scheduled their vote, “but we believe it could be happening in the coming days.”

The unique code for gun sellers would apply to standalone gun and ammo sellers, not sporting good stores or large retailers that also happen to sell firearms, they said.

Other financing methods draw scrutiny

The gunmen in the 2016 Pulse nightclub shooting in Orlando and the 2012 Aurora, Colorado, shooting at a movie theater used Mastercard cards to make large purchases of guns, ammunition or military gear in the days leading up to those events, Lander said Tuesday.

The hope is that the credit card companies will vote in favor at that meeting, Lander said. But if they don’t, “then we will proceed with the shareholder resolution, seeking to get a majority of shareholders voting in favor of a resolution that would require them to explain their vote,” Lander said. 

Creating an MCC for gun stores “would help credit-card companies fulfill their responsibility to prohibit the use of their networks for illegal activity,” a CalSTRS spokesperson said in an email. “Failing to do so could result in regulatory, reputational and litigation risks that could harm shareholder value.” The spokesperson did not respond to a question on whether CalSTRS will file shareholder proposals with the card companies too.

The shareholder proposals filed with Mastercard and Amex can’t direct those companies how to vote on the MCC issue, but it’s “a transparency resolution,” Lander said Tuesday. 

The first step is getting ISO to vote to create the category code, Lander said. The second step is getting card companies to use it. “Generally, they adopt what the ISO establishes, but it’s not a requirement,” he said. 

In June, Mastercard shareholders rejected a proposal that had asked the company’s board to produce a report on ghost guns, or guns that are untraceable.

Even card alternatives are coming under pressure. Also this week, federal lawmakers issued a letter to Dusty Wunderlich, the CEO of buy now-pay later company Credova, that included more than a dozen questions related to information on the company’s BNPL financing for the online purchase of guns and ammunition.

“We are concerned that the ease with which buyers can acquire guns through BNPL will result in more guns and increased gun violence in our nation’s communities,” a group of Congress members wrote in the letter.