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Bill proposing new merchant code for firearm purchases heads to House for final vote

Currently firearm purchases are categorized as 'sporting goods' with banks and credit card companies. A new bill, if passed, would change that.
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Posted at 4:55 PM, Mar 28, 2024
and last updated 2024-03-29 13:37:42-04

DENVER — Two Colorado gun reform bills passed out of committee this week concerning changes at the point of sale for firearms.

One of the bills, HB24-1353, would create a state-level firearms dealership permit in order to sell guns. The permit would require an annual finger print background check for employees, training on how to prevent theft and identify people who should not have access to guns, random inspections, rules on when firearms could be sold and additional compliance on storage.

"We're already being regulated by the ATF, our Federal Firearms License covers a majority of that. I think it just gives the State a little more- we're under their thumb," said Wayne Price, owner of The Gun Room in Lakewood. "Every gun goes out with a background check all the information is correct on their background check. For example, if you spell your county wrong, we get cited. So there are a lot of details that we have to pay attention to. So we're quite regulated as it is."

He and other gun store owners Denver7 spoke to call it over regulation.

The state permit would cost business owners $400 and if a business is not compliant they could face a fine of up to $250,000. Price said it's not even the financial burden he's concerned about.

"It's not cost in dollars. It's cost in regulation, and the amount of work it takes for us to make sure we are 100% compliant with employee training with our point of sale communicating with a book that the ATF looks at," said Price, "We turn away sales regularly, people trying to buy guns for other people, we shut down a ring that was running guns to Mexico. We are the front line, we're not the enemy. Why don't you give us some tools to help, instead of trying to hurt us?"

Another bill, SB24-066, would require banks and credit card companies to update the merchant code for fire arm sales. There's a merchant code that's associated with hundreds of different types of transactions including bakery, automotive parts, cigar stores, shoes, legal services etc.

Currently firearms are contained in the merchant code for 'sporting goods.'

"Firearms are designed to kill and they're different than a football, a basketball, a tent, hiking gear," said Rep. Javier Mabrey, District 1 (D), a co-sponsor of SB24-066, "I recognize and respect that people use firearms to go hunting. That's great and it's a part of our culture. However, you can't kill with any other sporting goods."

The bill would require banks and credit card companies to create a separate merchant code for guns and ammunition, to easier identify if someone is spending a lot of money quickly on stocking up on weapons.

"Like the Aurora shooter did in a few days, in a short period of time, before he shot up the movie theater in 2012, or like the Las Vegas shooter racked up $99,000 in credit card debt," said Rep. Mabrey, "there's nothing in the bill that says, then guaranteed you're gonna get raided or searched. But it could be a tip that, combined with other information, could serve to prevent a tragedy."

Last year Visa and Mastercard paused their decision to start this categorization for their companies.

If the Colorado bill is passed, the attorney general's office could seek a civil penalty of up to $10,000 from financial institutions if they do not comply.

"What is the end goal? What are they trying to do? Why do they want to track that firearm purchase? If a customer comes in, they fill out the paperwork, CBI gives me an approval, FBI gives me approval, I can transfer that firearm to them legally. That's their Second Amendment Right," Price said.

Price said he's concerned the merchant code change would have unintended consequences, particularly for collectors of historical guns. Currently in The Gun Room is an early 19th century shotgun on consignment for $14,500.

"There's people that only collect certain revolvers, certain long rifles and they're expensive. So if that credit card tracking shows a $15,000 purchase, they don't know if they bought one gun or 15 AR-15s," said Price," there's no comparison to the amount spent versus how many guns you get."

SB24-066 will be heading to the House for a final vote after already passing the Senate. Sponsors say there are no amendments to be discussed.


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