House advances bill banning use of firearms merchant code on credit-card transactions, citing privacy concerns

Representative Malloy presented a second substitute for House Bill 406 to prohibit use of the merchant category code (ISO code number 5723) that can identify firearm and related sales on card-transaction records. Malloy said the code was created to track firearm purchases and that banning its use in Utah would protect purchaser privacy and align the state with several other states that have enacted similar restrictions.

"This code was developed specifically for firearm sales," Malloy said. "The purpose of this is to make sure that people's privacy and their Second Amendment rights are protected, and that these codes are not utilized to track firearm sales or the people who purchase it."

Members asked whether merchant codes are widely used for other products and whether the state should direct private-industry coding practices. The sponsor replied that many merchants are assigned generalized codes and that the bill does not force businesses to adopt a particular code; it simply prohibits the use of that specific code. Representative Daley Provo asked a series of questions that the sponsor answered on card-coding practices and enforcement.

Enforcement in the substitute is assigned to the attorney general's office. Representative Malloy said the state would be joining "about 7 or 8 other states" with similar laws and described the bill as a protection against a federal or private tracking mechanism.

The House passed the second substitute to HB406 by a vote of 68-4. The bill will be transmitted to the Senate for further consideration. Floor discussion noted the policy intent and potential commerce/industry questions but did not include on-the-floor changes to enforcement beyond designating the AG's office.