Should banks track firearm sales?

The Nebraska Legislature is currently considering a bill that has sparked debate over privacy, gun rights, and financial regulations. LB686, introduced by Sen. Dan Lonowski of Hastings, would prohibit the use of merchant category codes to identify firearm retailers, effectively blocking financial institutions from tracking gun-related purchases in Nebraska.

Supporters of the bill argue that it is a necessary safeguard against financial discrimination and an overreach of surveillance.

Merchant category codes (MCCs) are used by credit card networks to classify businesses based on the types of goods and services they provide. Before 2023, firearms and ammunition retailers were categorized under general merchandise or sporting goods. More recently, however, new codes have been introduced specifically for firearm and ammunition purchases, a move that gun rights advocates argue could lead to backdoor registration and potential discrimination against lawful gun owners.

Nineteen other states have already passed similar protections, a fact that underscores the growing concern over the use of financial tracking mechanisms to monitor gun transactions. Proponents of LB686—including the National Shooting Sports Foundation and the National Rifle Association—consider it a necessary preemptive measure. They point to recent legislation in California, New York, and Colorado that mandates the use of firearm-specific MCCs, warning that if such tracking is allowed to take root in Nebraska, it could lead to unwarranted scrutiny or even restrictions on legal firearm purchases.

Critics, however, raise valid concerns. The Nebraska Bankers Association and the Nebraska Independent Community Bankers have both testified against the measure, arguing that it could disrupt interstate commerce and create regulatory headaches for financial institutions. Some states require the use of these merchant codes, and if Nebraska outright bans them, it could put banks and payment processors in a difficult legal position when operating across state lines.

Additionally, some question whether the bill addresses a real problem or is merely a symbolic move. While it is true that some financial institutions have expressed interest in identifying firearm purchases, major credit card companies, including Visa and Mastercard, paused plans to implement firearm-specific MCCs following public and political pushback. If the industry itself is not currently enforcing this tracking, opponents argue, why is state intervention necessary?

Still, the core issue remains: should financial institutions be allowed to track and categorize firearm purchases in a way that could later be used against gun owners? There is no shortage of ways for those interested in tracking firearm ownership to do so, from gun magazine subscriptions to online search histories,but financial transactions are uniquely sensitive. LB686 aims to ensure that they do not become another tool for targeted surveillance.

We ultimately support LB686 as a reasonable measure to protect both privacy and Second Amendment rights. At the same time, we recognize that responsible gun ownership and safe storage practices are just as essential to ensuring that firearm rights remain protected in the long term. This bill is not about expanding gun rights or restricting them—it is about ensuring that financial institutions do not overstep their role and that privacy remains a fundamental consideration in all consumer transactions.