In June, the American firearms industry lodged a resounding victory against attempts by gun control advocates to put it out of business with frivolous lawsuits when the U.S. Supreme Court issued its 9-0 ruling in Smith & Wesson Brands, Inc. v. Estados Unidos Mexicanos. The important case reasserted the Protection of Lawful Commerce in Arms Act, making clear that Congress intended to protect the firearms industry from liability in cases where criminal third-parties misuse their products.
Given the high-profile plaintiff and forum, the case garnered a great deal of headlines. However, there has been plenty of other work going on to help preserve a vibrant firearms industry for America’s gun owners.
Key to this effort is the enactment of state-level Firearm Industry Nondiscrimination (FIND) Acts. This legislation is designed to prevent banks and other financial institutions from discriminating against the lawful firearms industry.
On June 25, National Shooting Sports Foundation (NSSF) Senior Vice President Larry Keane published an article detailing the advances the firearms industry has made in combatting financial discrimination. While NRA-ILA represents America’s gun owners, NSSF is the firearms industry’s trade association.
Keane noted that FIND Acts have now been enacted in 11 states and explained how these laws restrict “state agencies and local government entities from entering into taxpayer-funded contracts with corporations that discriminate against members of the firearm industry.”
Moreover, these laws have prompted concrete action, as Keane explained in relation to recent developments in Texas,
Texas Gov. Greg Abbott signed the FIND Act into law in 2021. Texas Attorney General Ken Paxton followed up by denying Citigroup competition for state bonds in 2023 because of their discriminatory practices, a move that cost the corporate banking giant $3.4 billion when they were barred from underwriting state bonds. Most recently, he warned Austin City officials that contracts in which it entered with WEX Bank violate the FIND Act and warned them to amend the contract or face legal action. WEX Bank debanked Defense Solutions Group (DSG), a military and law enforcement provider specializing in high-end equipment. AG Paxton says that’s a clear violation of the law.
The importance of these efforts cannot be overstated.
Longtime gun rights supporters will remember Operation Chokepoint, an Obama administration program to weaponize the banking industry and financial service providers against certain lawful businesses and merchants. Implemented by Eric Holder’s Department of Justice and the Federal Deposit Insurance Corporation (FDIC), the ostensible objective was to fight consumer fraud by cutting off access to credit and bank services for businesses classified as “high risk” (e.g., online gambling sites, escort services, payday loan operations, and those that had a higher incidence of consumer complaints, returns, or chargebacks).
However, the list also included federally licensed firearm and ammunition dealers, already among the most heavily regulated businesses in America. The FDIC “publicly warned banks that it was intensifying its own scrutiny of banks that did business with ‘high risk’ business customers who use payment processors (for example, firearm dealers who accept credit cards, as well as law-abiding payday lenders),” with the result that many banks opted to stop providing services to completely legitimate gun-related businesses.
President Trump ended Operation Choke Point in 2017, with the DOJ acknowledging that it was a “misguided initiative.”
There is some indication that the second Trump administration could be poised to go further to prevent discriminatory financial practices.
On June 24, the Wall Street Journal published an item titled, “Big Banks, Worried About Being Trump’s Next Target, Race to Appease Republicans.” The piece explained,
Representatives from JPMorgan Chase, Citigroup, Wells Fargo and other big banks met in recent weeks with officials in states including Texas and Oklahoma to defend against allegations that they refuse to do business with industries such as gun manufacturing and fossil-fuel extraction, people familiar with the discussions said.
Banks are also worried about a bigger threat: that President Trump could turn the power of the federal government against banks, as he has with universities and big law firms.
The Trump administration is considering an executive order on “debanking,” according to people familiar with the matter.
Then there is the continuing campaign to combat the potential misuse of payment processor Merchant Category Codes (MCC) to track or disrupt lawful gun purchases.
In 2022, the International Organization for Standardization (ISO) approved a Merchant Category Code (MCC) specifically for firearm retailers. MCCs are used by payment processors (like Visa and Mastercard) and other financial services companies to categorize transactions. MCCs enable payment processors and banks to identify, monitor, and collect data on certain types of transactions. Before the ISO decision, firearm retailers fell under the MCC for sporting goods stores or miscellaneous retail.
Backers of the firearm retailer MCC have made clear that their goal is to use the code to enact further gun control through a public-private partnership. Amalgamated Bank, which pushed the ISO to adopt the firearm retailer MCC, has stated that they intend to create a software algorithm that will use the MCC “to report suspicious activity and illegal gun sales to authorities.” The potential for this scheme to implicate completely lawful retail firearm sales, which are already subject to a host of safeguards under federal law, is obvious, if not the entire point.
Since the firearm retailer MCC was approved by the ISO, 20 states have enacted legislation to prevent its use and protect gun owner privacy. Further, federal legislation has been introduced to halt this scheme at the national level.
Gun owners understand that a thriving firearms industry is necessary to exercising Second Amendment rights. In the last several years, there has been encouraging progress in protecting the firearms industry and gun owners from the threats posed by lawfare and financial discrimination. NRA-ILA will continue to encourage state legislatures, the U.S. Congress, and the Trump administration to protect this vital American industry from unjust, ideologically-motivated attacks.
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