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Senate File 2221 - IntroducedA Bill ForAn Act 1relating to payment card transactions involving firearms
2and ammunition, and providing civil penalties.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 554H.1 Definitions.
21. “Ammunition” means the same as defined in section 683.1.
32. “Assign” or “assignment” means a financial institution’s
4policy, process, or practice that labels, links, or otherwise
5associates a firearms code with a merchant or a payment card
6transaction in a manner that allows the financial institution,
7or other entity facilitating or processing the payment card
8transaction, to identify whether a merchant is a firearms
9retailer or whether a transaction involves the sale of firearms
10or ammunition.
113. “Customer” means a person engaged in a payment
12card transaction facilitated or processed by a financial
13institution.
144. “Disclosure” or “disclose” means the transfer,
15publication, or distribution of protected financial information
16to another person or entity for any purpose other than any of
17the following:
18a. Processing or facilitating a payment card transaction.
19b. Taking any action related to dispute processing, fraud
20management, or protecting transaction integrity from concerns
21related to illegal activities, breach, or cyber risks.
225. “Financial institution” means a person other than a
23merchant involved in facilitating or processing a payment card
24transaction, including but not limited to any bank incorporated
25under the provisions of any state or federal law, an acquirer,
26a payment card issuer, a payment card network, a payment
27gateway, or a payment card processor.
286. “Financial record” means a record held by a financial
29institution related to a payment card transaction that the
30financial institution has processed or facilitated.
317. “Firearm” means any weapon that is capable of expelling,
32designed to expel, or that may readily be converted to expel
33ammunition, and includes a firearm component or accessory.
348. “Firearms code” means a merchant category code approved
35by the international organization for standardization that is
-1-1specifically for firearms retailers and that is assigned to a
2retailer by the retailer’s acquirer.
39. “Firearms retailer” means a person physically located
4within the state who engages in the lawful selling or trading
5of firearms or ammunition.
610. a. “Payment card” means any card that is issued
7pursuant to an agreement or arrangement that provides for all
8of the following:
9(1) One or more issuers of the payment card.
10(2) A network of persons unrelated to each other and to the
11issuer who agree to accept a payment card as payment.
12(3) Standards and mechanisms for settling the transactions
13between the merchandise-acquiring person and the merchant that
14agrees to accept the payment card as payment.
15b. “Payment card” includes credit cards, debit cards,
16stored-value cards including gift cards, and payment through
17any distinctive marks of a payment card including a credit card
18number. The acceptance as payment of any account number or
19other indicia associated with a payment card shall be treated
20in the same manner as accepting the payment card as payment.
2111. “Payment card transaction” means any transaction in
22which a payment card is accepted as payment.
2312. “Protected financial information” means any record of
24a sale, purchase, return, or refund involving a payment card
25that is retrieved, characterized, generated, labeled, sorted,
26or grouped based on the assignment of a firearms code.
27 Sec. 2. NEW SECTION. 554H.2 Financial institutions.
281. A financial institution or agent of a financial
29institution shall not do any of the following:
30a. Require the use of a firearms code in a manner that
31distinguishes a firearms retailer from other retailers.
32b. Subject to subsection 2, decline a payment card
33transaction involving a firearms retailer based solely on the
34acquirer’s assignment or nonassignment of a firearms code to
35the firearms retailer.
-2- 12. Subsection 1 shall not be construed to prohibit a
2financial institution from declining or otherwise refusing to
3process a payment card transaction for any of the following
4reasons:
5a. If necessary to comply with applicable state or federal
6laws.
7b. If requested by a customer.
8c. If necessary due to fraud controls.
9d. For purposes of merchant category exclusions offered by
10a financial institution for expenditure control or corporate
11card control.
123. Except as otherwise required by law, a financial
13institution may not disclose a financial record, including a
14firearms code that was collected in violation of this section,
15unless the disclosure of such financial record or firearms
16code was based on a good-faith conclusion that the financial
17institution’s action was required by law.
184. This section shall not be construed to limit the
19authority of a financial institution to negotiate with
20responsible parties, or to otherwise impair a financial
21institution’s actions related to dispute processing, fraud
22management, protection from illegal activities, breach, or
23cyber risks.
24 Sec. 3. NEW SECTION. 554H.3 Enforcement — penalties.
251. The attorney general shall investigate reasonable
26alleged violations of this chapter. If the attorney general
27has reasonable belief that a person is in violation of this
28chapter, the attorney general shall provide written notice to
29the person determined to have committed the violation.
302. Upon receipt of notice of a violation under subsection
311, the person shall have thirty calendar days to cease the
32violation.
333. If the violation persists after the expiration of the
34thirty-day period under subsection 2, the attorney general has
35the sole authority to bring civil action in district court to
-3-1enjoin further violations by a person found to be in violation
2of this chapter, in addition to other remedies permitted by
3law.
44. If a person knowingly or willfully fails to comply
5with an injunction issued under subsection 3, after thirty
6calendar days of the date the person is served with the
7injunction, the attorney general may petition the district
8court to impose civil penalties in an amount not to exceed ten
9thousand dollars per violation, taking into consideration the
10financial resources of the violator and the harm or risk of
11harm to the violator’s rights under the second amendment to the
12Constitution of the United States and Article I, section 1A,
13of the Constitution of the State of Iowa resulting from the
14violation.
155. It shall be a defense to a proceeding initiated pursuant
16to this section that a firearms code was required to be
17disclosed or assigned by law.
18EXPLANATION
19The inclusion of this explanation does not constitute agreement with
20the explanation’s substance by the members of the general assembly.
21This bill relates to payment card transactions of firearms
22and ammunition.
23The bill prohibits a financial institution, or an agent
24of a financial institution, from requiring the use of a
25firearms code in a way that distinguishes a firearms retailer
26from other retailers. “Financial institution”, “firearms
27code”, and “firearms retailer” are defined in the bill. The
28bill also prohibits a financial institution from declining
29a payment card transaction involving a firearms retailer
30based on the assignment of a firearms code. “Payment card
31transaction” and “assignment” are defined in the bill. The
32bill does not prohibit a financial institution from declining
33or refusing to process a payment card transaction if necessary
34to comply with applicable state or federal laws, if requested
35by a customer, if necessary due to fraud controls, or for
-4-1purposes of merchant category exclusions offered by a financial
2institution for purposes of expenditure control or corporate
3card control. The bill prohibits a financial institution from
4disclosing a financial record, including a firearms code,
5unless the disclosure was based on a good-faith conclusion that
6the financial institution’s disclosure was required by law.
7“Disclosure” and “financial record” are defined in the bill.
8The bill does not limit or impair the authority of a financial
9institution to negotiate with responsible parties or a
10financial institution’s actions related to dispute processing,
11fraud management, or protecting against illegal activities,
12breach, or cyber risks.
13Under the bill, the attorney general shall investigate
14reasonable alleged violations of the bill and, if the attorney
15general has reasonable belief that a person is in violation of
16the bill, the attorney general shall provide written notice
17to the person determined to have committed the violation.
18Upon receipt of notice of a violation, a person shall have
1930 calendar days to cease the violation or, if the violation
20persists, the attorney general may bring civil action in
21district court to enjoin further violations, in addition to
22other remedies permitted by law. If a person knowingly or
23willfully fails to comply with an injunction after 30 calendar
24days from the date of being served with the injunction,
25the attorney general may petition the district court to
26impose civil penalties in an amount not more than $10,000
27per violation. The bill creates a defense to a proceeding
28initiated under the bill that a firearms code was required to
29be disclosed or assigned by law.
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2and ammunition, and providing civil penalties.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 554H.1 Definitions.
21. “Ammunition” means the same as defined in section 683.1.
32. “Assign” or “assignment” means a financial institution’s
4policy, process, or practice that labels, links, or otherwise
5associates a firearms code with a merchant or a payment card
6transaction in a manner that allows the financial institution,
7or other entity facilitating or processing the payment card
8transaction, to identify whether a merchant is a firearms
9retailer or whether a transaction involves the sale of firearms
10or ammunition.
113. “Customer” means a person engaged in a payment
12card transaction facilitated or processed by a financial
13institution.
144. “Disclosure” or “disclose” means the transfer,
15publication, or distribution of protected financial information
16to another person or entity for any purpose other than any of
17the following:
18a. Processing or facilitating a payment card transaction.
19b. Taking any action related to dispute processing, fraud
20management, or protecting transaction integrity from concerns
21related to illegal activities, breach, or cyber risks.
225. “Financial institution” means a person other than a
23merchant involved in facilitating or processing a payment card
24transaction, including but not limited to any bank incorporated
25under the provisions of any state or federal law, an acquirer,
26a payment card issuer, a payment card network, a payment
27gateway, or a payment card processor.
286. “Financial record” means a record held by a financial
29institution related to a payment card transaction that the
30financial institution has processed or facilitated.
317. “Firearm” means any weapon that is capable of expelling,
32designed to expel, or that may readily be converted to expel
33ammunition, and includes a firearm component or accessory.
348. “Firearms code” means a merchant category code approved
35by the international organization for standardization that is
-1-1specifically for firearms retailers and that is assigned to a
2retailer by the retailer’s acquirer.
39. “Firearms retailer” means a person physically located
4within the state who engages in the lawful selling or trading
5of firearms or ammunition.
610. a. “Payment card” means any card that is issued
7pursuant to an agreement or arrangement that provides for all
8of the following:
9(1) One or more issuers of the payment card.
10(2) A network of persons unrelated to each other and to the
11issuer who agree to accept a payment card as payment.
12(3) Standards and mechanisms for settling the transactions
13between the merchandise-acquiring person and the merchant that
14agrees to accept the payment card as payment.
15b. “Payment card” includes credit cards, debit cards,
16stored-value cards including gift cards, and payment through
17any distinctive marks of a payment card including a credit card
18number. The acceptance as payment of any account number or
19other indicia associated with a payment card shall be treated
20in the same manner as accepting the payment card as payment.
2111. “Payment card transaction” means any transaction in
22which a payment card is accepted as payment.
2312. “Protected financial information” means any record of
24a sale, purchase, return, or refund involving a payment card
25that is retrieved, characterized, generated, labeled, sorted,
26or grouped based on the assignment of a firearms code.
27 Sec. 2. NEW SECTION. 554H.2 Financial institutions.
281. A financial institution or agent of a financial
29institution shall not do any of the following:
30a. Require the use of a firearms code in a manner that
31distinguishes a firearms retailer from other retailers.
32b. Subject to subsection 2, decline a payment card
33transaction involving a firearms retailer based solely on the
34acquirer’s assignment or nonassignment of a firearms code to
35the firearms retailer.
-2- 12. Subsection 1 shall not be construed to prohibit a
2financial institution from declining or otherwise refusing to
3process a payment card transaction for any of the following
4reasons:
5a. If necessary to comply with applicable state or federal
6laws.
7b. If requested by a customer.
8c. If necessary due to fraud controls.
9d. For purposes of merchant category exclusions offered by
10a financial institution for expenditure control or corporate
11card control.
123. Except as otherwise required by law, a financial
13institution may not disclose a financial record, including a
14firearms code that was collected in violation of this section,
15unless the disclosure of such financial record or firearms
16code was based on a good-faith conclusion that the financial
17institution’s action was required by law.
184. This section shall not be construed to limit the
19authority of a financial institution to negotiate with
20responsible parties, or to otherwise impair a financial
21institution’s actions related to dispute processing, fraud
22management, protection from illegal activities, breach, or
23cyber risks.
24 Sec. 3. NEW SECTION. 554H.3 Enforcement — penalties.
251. The attorney general shall investigate reasonable
26alleged violations of this chapter. If the attorney general
27has reasonable belief that a person is in violation of this
28chapter, the attorney general shall provide written notice to
29the person determined to have committed the violation.
302. Upon receipt of notice of a violation under subsection
311, the person shall have thirty calendar days to cease the
32violation.
333. If the violation persists after the expiration of the
34thirty-day period under subsection 2, the attorney general has
35the sole authority to bring civil action in district court to
-3-1enjoin further violations by a person found to be in violation
2of this chapter, in addition to other remedies permitted by
3law.
44. If a person knowingly or willfully fails to comply
5with an injunction issued under subsection 3, after thirty
6calendar days of the date the person is served with the
7injunction, the attorney general may petition the district
8court to impose civil penalties in an amount not to exceed ten
9thousand dollars per violation, taking into consideration the
10financial resources of the violator and the harm or risk of
11harm to the violator’s rights under the second amendment to the
12Constitution of the United States and Article I, section 1A,
13of the Constitution of the State of Iowa resulting from the
14violation.
155. It shall be a defense to a proceeding initiated pursuant
16to this section that a firearms code was required to be
17disclosed or assigned by law.
18EXPLANATION
19The inclusion of this explanation does not constitute agreement with
20the explanation’s substance by the members of the general assembly.
21This bill relates to payment card transactions of firearms
22and ammunition.
23The bill prohibits a financial institution, or an agent
24of a financial institution, from requiring the use of a
25firearms code in a way that distinguishes a firearms retailer
26from other retailers. “Financial institution”, “firearms
27code”, and “firearms retailer” are defined in the bill. The
28bill also prohibits a financial institution from declining
29a payment card transaction involving a firearms retailer
30based on the assignment of a firearms code. “Payment card
31transaction” and “assignment” are defined in the bill. The
32bill does not prohibit a financial institution from declining
33or refusing to process a payment card transaction if necessary
34to comply with applicable state or federal laws, if requested
35by a customer, if necessary due to fraud controls, or for
-4-1purposes of merchant category exclusions offered by a financial
2institution for purposes of expenditure control or corporate
3card control. The bill prohibits a financial institution from
4disclosing a financial record, including a firearms code,
5unless the disclosure was based on a good-faith conclusion that
6the financial institution’s disclosure was required by law.
7“Disclosure” and “financial record” are defined in the bill.
8The bill does not limit or impair the authority of a financial
9institution to negotiate with responsible parties or a
10financial institution’s actions related to dispute processing,
11fraud management, or protecting against illegal activities,
12breach, or cyber risks.
13Under the bill, the attorney general shall investigate
14reasonable alleged violations of the bill and, if the attorney
15general has reasonable belief that a person is in violation of
16the bill, the attorney general shall provide written notice
17to the person determined to have committed the violation.
18Upon receipt of notice of a violation, a person shall have
1930 calendar days to cease the violation or, if the violation
20persists, the attorney general may bring civil action in
21district court to enjoin further violations, in addition to
22other remedies permitted by law. If a person knowingly or
23willfully fails to comply with an injunction after 30 calendar
24days from the date of being served with the injunction,
25the attorney general may petition the district court to
26impose civil penalties in an amount not more than $10,000
27per violation. The bill creates a defense to a proceeding
28initiated under the bill that a firearms code was required to
29be disclosed or assigned by law.
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