On a party-line vote, Democratic lawmakers released a bill from committee on Wednesday to require credit card companies to use a new “merchant category code” (MCC) that would generically identify purchases made at businesses specializing in the sale of firearms and ammunition. Here are some notes from the hearing: State Rep. Krista Griffith (D-Fairfax) is the co-prime sponsor of House Bill 45. She was also the prime sponsor of the Delaware Personal Data Privacy Act (enacted in 2023), which provides Delawareans with certain protections regarding the use of digitally collected information. However, she indicated that those safeguards would not apply to data that would be gathered from her new merchant category code measure. As the chair of the House Judiciary Committee, Rep. Griffith allowed representatives of three special interest groups to provide the bulk of the testimony on the bill and field members' questions: Liddy Ballard, State Policy Manager for the Brady Campaign; Tracy Manza Murphy, Executive Director of the Coalition for a Safer Delaware and Coalition Against Gun Violence; and Hudson Munoz, Executive Director of Guns Down America. Hudson Munoz is a former staffer of Amalgamated Bank, where he led the bank’s effort to establish a merchant category code for gun and ammunition stores. The bank describes itself as “the financial institution for progressive people and organizations” and has a record of opposition to firearms businesses. In 2022, it successfully lobbied the International Organization for Standardization to create a merchant category code to categorize gun and ammunition retailers. Rep. Griffith said, “House Bill 45 is truly a law enforcement bill." She said patterns of transactions that her bill would help banks to spot "might flag something, prompting the financial institution to look a little deeper into what these transactions are all about, and then, if necessary, alert law enforcement to this.” Ms. Ballard said that for an individual to be flagged for a suspicious purchase, a specific set of criteria would have to be met. “During a 60-day look back period, all of these things would have to be true. A bank customer transacts at five or more distinct gun merchants, aggregate purchase transactions total $2,500 or more from gun merchants, the number of transactions at gun stores are more than 50% of the total transactions for that individual, and the aggregate purchase amount is more than 50% of the purchases by the customer. This example is something that might indicate that someone is trying to hide or be deceptive about their growing interest and increasing intensity in firearms and potentially amassing a stockpile to commit some of the mass shootings that we’ve seen.” She later added that "this would not impact anyone who is not engaging in nefarious activity.” None of the cited criteria appears in House Bill 45, seemingly giving financial services companies discretion over the composition of this algorithm and determining what trigger is appropriate for alerting authorities. The bill does not contain any indication of what state agencies would be contacted by a financial services company that identified what it determined to be suspicious activity, nor how law enforcement officials would conduct a probe of legal purchases made from properly authorized firearms retailers. Under the legislation, the new firearms merchant code would only be applied to a “federal firearms licensee for which the highest sales value is, or is expected to be, from the combined sale…of firearms, firearm accessories, or ammunition.” State Rep. Sean Lynn (D-Dover West) suggested amending the bill to capture firearms and ammunition sales from diversified retailers, like Cabela’s, which this legislation would not cover. State Rep. Frank Cooke (D-South Wilmington) advanced that line of thinking, adding: “Let’s look at [including] pawn shops…to make this bill even stronger, so we don’t exclude anybody.” A merchant code does not identify what items were purchased by a particular individual; it only classifies the type of retailer from which the purchases were made. However, in its current form, HB 45 would apply a new code specifically to retailers who derive the majority of their income from the sale of firearms, firearm accessories, and ammunition, making any purchase identified by the code as likely being made by a gun owner. Jeff Hague, president of the Delaware State Sportsmen's Association, called the proposal an attempt at "backdoor regulation." He also cast doubt on its stated rationale, noting that the majority of guns used in crimes are not obtained from gun stores. His testimony is supported by a 2019 U.S. Department of Justice study of state and federal prisoners who possessed a gun while committing their offenses. It revealed that 90% of these felons did not obtain their guns from a retailer. In written comments provided to the committee, the Congressional Sportsmen’s Foundation opposed House Bill 45, noting, in part: "Protecting the personal information of sportsmen and women is paramount to the continued success of the time-honored outdoor traditions that Delawareans have long enjoyed. The passage of HB 45 allows financial institutions to distinguish firearm retailers from other retailers, potentially allowing the existence of a list or de facto registry of privately owned firearms in the state." House Republicans on the Judiciary Committee--State Reps. Valerie Jones Giltner (Georgetown), Jeff Hilovsky (Long Neck, Oak Orchard), Bryan Shupe (Milford South), and Charles Postles (Milford North, Frederica)--opposed the bill's release. The measure is now on the Ready List, making it eligible to be added to the House Agenda for a vote. Three states have enacted a law similar to HB 45 within the last year: New York, California, and Colorado. At least 16 states, including West Virginia, Florida, Texas, North Dakota, Mississippi, and Idaho, have enacted legislation prohibiting the use of the code in their jurisdictions.