Unicameral Update
The Banking, Commerce and Insurance Committee heard testimony March 17 on a measure that would prohibit implementation of merchant category codes in Nebraska that identify firearm retailers.
Hastings Sen. Dan Lonowski, sponsor of LB686, said the measure is intended to protect the privacy of Nebraska firearm owners and retailers from disclosure of information that could lead to discrimination against them.
The bill would prohibit a payment card network from requiring or incentivizing use of a merchant category code in a manner that distinguishes a firearm retailer from other retailers. In addition, a covered entity could not assign a firearm retailer a merchant category code that distinguishes them from other retailers.
LB686 also would prohibit government entities, officials, agents or employees of a government entity or official from knowingly keeping or causing to be kept any list, record or registry of privately owned firearms or the owners of firearms, except for those records kept during the regular course of a criminal investigation, prosecution or as otherwise required by law.
The Nebraska Attorney General’s Office would investigate alleged violations of the bill’s provisions and violators could be subject to injunctions and civil penalties.
Lonowski said merchant category codes are used by payment card networks to identify entities by the types of goods they sell or services they provide. Prior to 2023, he said, merchants who sold firearms or ammunition were categorized as general merchandise or sporting goods.
Nineteen states have passed laws similar to LB686, Lonowski said, in an attempt to protect the privacy of gun owners whose purchases might be identified by merchant category codes and later used against them.
“Nebraska should follow the lead of those states and protect the privacy of gun owners,” Lonowski said. “By enacting LB686, we affirm our commitment to protecting the constitutional rights and privacy of Nebraska citizens and businesses.”
Moriah Day, director of government relations and state affairs for the National Shooting Sports Foundation, testified in favor of the proposal.
He said California, New York and Colorado have passed legislation requiring implementation of the new codes for firearm and ammunition merchants. Although there currently is a pause on implementing the new codes nationally, he said, the bill would be a positive proactive step to keep implementation from happening in the future.
“To make certain this pause remains in place permanently and the status quo is maintained, I would urge you to join the growing list of 19 states that have passed similar measures and pass LB686 this session,” Day said.
Also supporting the bill was Travis Couture-Lovelady, representing the National Rifle Association. He said the measure would ensure that businesses and customers aren’t “unjustly singled out” or discriminated against by financial institutions for exercising their constitutional Second Amendment rights.
“It’s a preemptive strike to protect the rights of Nebraskans,” Couture-Lovelady said.
Ryan McIntosh of the Nebraska Bankers Association testified in opposition to LB686, saying it could disrupt interstate commerce. Some states require use of merchant category codes, he said, and it would be problematic if other states outright ban their use.
Also speaking against the proposal was Dexter Schrodt, president and CEO of the Nebraska Independent Community Bankers. While the proposal is meant to protect firearms retailers, he said, it could hamper the ability of community banks to serve their customers by limiting their ability to interact with payment card networks based on policies that banks cannot control.
“In principle, we do oppose any legislation that creates, in statute, language that protects one industry by creating requirements [on] and limiting rights of another industry,” Schrodt said.
The committee took no immediate action on LB686.