SB281INTRODUCED
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SB281
41AJIRR-1
By Senator Melson
RFD: Banking and Insurance
First Read: 04-Apr-24
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5 41AJIRR-1 04/04/2024 TRP (L)tgw 2024-1402
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First Read: 04-Apr-24
SYNOPSIS:
This bill would prohibit a financial institution
from requiring merchants to use a merchant category
code (MCC) to distinguish a firearms retailer from a
general merchandise retailer or a sporting goods
retailer during a firearms transaction amounting to
financial surveillance and from disclosing financial
information regarding the transaction.
This bill would provide for definitions.
This bill would prohibit a state agency or other
political subdivision of the state, or any other
person, public or private, from keeping any record of
privately owned firearms or registry of the owner of
those firearms.
This bill would prohibit a financial institution
from using a firearms code to engage in certain
discriminatory conduct in the state.
This bill would also authorize the Attorney
General to investigate alleged violations of this act,
to enforce this act by bringing an action to recover
civil penalties, and to restrain and enjoin an
individual or entity from violating this act.
A BILL
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A BILL
TO BE ENTITLED
AN ACT
Relating to financial institutions; to provide
definitions; to prohibit a financial institution from using a
merchant category code to compile and disclose data tracking
firearms transactions; and to authorize the Attorney General
to enforce this act.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. This act may be cited as the Second
Amendment Financial Privacy Act.
Section 2. For the purposes of this act, the following
words have the following meaning:
(1) CUSTOMER. Any resident of this state engaged in a
payment card transaction that a financial institution
facilitates or processes.
(2) DISCLOSURE. The transfer, publication, or
distribution of protected financial information to another
person or entity for any purpose other than:
a. To process or facilitate a payment card transaction.
b. To take any actions related to dispute processing,
fraud management, or protection of transaction integrity from
concerns related to illegal activities, breach, or cyber
risks.
(3) FINANCIAL INSTITUTION. An entity involved in
facilitating or processing a payment card transaction,
including, but not limited to, a bank, savings institution, or
credit union authorized to do business in this state under
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credit union authorized to do business in this state under
federal or state law.
(4) FINANCIAL RECORD. A record held by a financial
institution related to a payment card transaction that the
financial institution has processed or facilitated.
(5) FIREARMS CODE. Any code or other indicator a
financial institution assigns to a merchant or to a payment
card transaction that identifies whether a merchant is a
firearms retailer or whether the payment card transaction
involves the purchase of a firearm, firearm accessories or
components, or ammunition. The term includes, but is not
limited to, a merchant category code assigned to a retailer by
a payment card network or other financial institution.
(6) FIREARMS RETAILER. Any person or entity engaged in
the lawful sale or transfer of a firearm, firearm accessories
or components, or ammunition.
(7) PAYMENT CARD. A credit card, debit card, check
card, or other card that is issued to an authorized user to
purchase or obtain goods, services, money, or any other thing
of value.
(8) PAYMENT CARD NETWORK. An entity that directly or
through a licensed member, processor, or agent provides the
proprietary services, infrastructure, and software that route
information and data to conduct debit card or credit card
transaction authorization, clearance, and settlement, and
which an entity uses in order to accept as a form of payment a
brand of debit card, credit card, or other device that may be
used to carry out debit or credit transactions.
(9) PROTECTED FINANCIAL INFORMATION. Any record of
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(9) PROTECTED FINANCIAL INFORMATION. Any record of
sale, purchase, return, or refund involving a payment card
that is retrieved, characterized, generated, labeled, sorted,
or grouped based on the assignment of a firearms code.
Section 3. (a) An individual or entity involved in
facilitating or processing an electronic payment transaction
and licensed to do business in this state, including, but not
limited to, a financial institution, payment card issuer, or
payment card network, shall not assign to a merchant or
require a merchant to use a firearms code in a way that
distinguishes a firearms retailer physically located in the
State of Alabama from general merchandise retailers or
sporting goods retailers.
(b)(1) For the purposes of the sale or transfer of
firearms, ammunition for use in firearms, and firearm
accessories, a firearms retailer shall not provide a firearms
code to a payment card issuer or payment network and may only
use or be assigned a merchant category code for general
merchandise retailers or sporting goods retailers.
(2) A financial institution shall not discriminate
against a firearms retailer by declining a lawful payment card
transaction based solely on the assignment or non-assignment
of a firearms code; provided, that a financial entity may
decline or otherwise refuse to process the transaction on the
basis of the firearms code only if necessary to comply with
this section or if requested by the customer or due to fraud
controls or merchant category exclusions offered by a
financial entity for the purpose of expenditure control or
corporate card control.
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corporate card control.
(c) Except for those records kept during the regular
course of a criminal investigation and prosecution or as
otherwise required by law, a state governmental agency or
local government, special district or other political
subdivision, or any official, agent, or employee of the state
or other governmental entity, or any other individual, public
or private, other than the owner or owner's representative,
shall not knowingly and willingly keep or cause to be kept any
list, record, or registry of privately owned firearms or any
list, record, or registry of the owners of those firearms.
(d) Except for those records kept in the regular course
of business required by order of the civil court issued during
civil court proceedings, a financial institution shall not
disclose a financial record, including a firearms code that
was collected in violation of this act.
(e) Except as otherwise required by law or rule, or
pursuant to the Attorney General's power to examine witnesses
and documents for the purpose of enforcing the provisions of
this chapter, a financial institution shall not disclose a
financial record, including a firearms code that was collected
in violation of this act, unless the disclosure of the
financial record or firearms code was based on a good-faith
conclusion that the entity's action was required by applicable
law or rule, or pursuant to the Attorney General's power to
examine witnesses and documents.
(f) Nothing in this section shall limit the ability of
a financial institution to negotiate with responsible parties
or otherwise impair the financial institution's actions
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or otherwise impair the financial institution's actions
related to dispute processing, fraud management, protection of
transaction integrity from concerns related to illegal
activities, breach, or cyber risks.
Section 4. (a) If the Attorney General has reasonable
cause to believe that an individual or entity has engaged in
or is about to engage in a violation of this chapter, the
Attorney General may examine witnesses and documents for the
purpose of enforcing the provisions of this chapter.
(b) Either a firearms retailer physically located in
the State of Alabama whose business was the subject of an
alleged violation of this act or a customer who transacted at
a firearms retailer physically located in Alabama whose
business was the subject of an alleged violation of this act,
may petition the Attorney General to investigate the alleged
violation.
(c) If the Attorney General believes an individual or
entity under investigation for violation of this act may have
information or be in possession, custody, or control of any
document or other tangible object relevant to the
investigation, before the institution of any court proceeding,
the Attorney General may serve upon the individual or entity a
written demand in the form of a subpoena, or subpoena duces
tecum, to appear and be examined under oath and to produce the
documents or objects for inspection and copying.
(1) Upon a finding by the Attorney General that there
has been a violation of this act, the Attorney General shall
give written notice to the individual or entity identifying
the specifics of the provisions of this act which were
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the specifics of the provisions of this act which were
violated.
(2) The Attorney General may not bring an action
against the individual or entity if the individual or entity
does all of the following:
a. Cures the identified violation within 30 days or
establishes to the Attorney General's satisfaction that a
suspected violation never occurred.
b. Provides the Attorney General a written statement
affirming that the individual or entity has:
1. Provided supporting documentation to show how the
violation was cured or establishes to the Attorney General's
satisfaction that a suspected violation never occurred.
2. Made changes to internal policies to prevent the
recurrence of any similar violation in the future.
(3) The Attorney General has exclusive authority to
enforce this act if the individual or entity fails to cure the
violation or breaches a written statement provided to the
Attorney General under this section.
(4) An individual or entity shall be liable for a civil
penalty in the amount of ten thousand dollars ($10,000) for
each violation.
(5) The Attorney General may bring an action to:
a. Recover a civil penalty under this section.
b. Restrain or enjoin a person or entity from violating
this chapter.
c. Request an order directing a financial institution,
individual, or entity to destroy all illegal registry records
and all copies.
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and all copies.
d. Request that the court enter any other orders the
court deems appropriate.
(6) The Attorney General may recover reasonable
attorney fees and other reasonable expenses incurred in
investigating and bringing an action under this section.
Section 5. The remedies set forth in this act shall be
exclusive remedies for violation of this act.
Section 6. It shall be a defense to a proceeding
initiated pursuant to this act that the firearms code was
required to be used based on a good-faith conclusion that the
individual or entity's disclosure or action was required by
applicable law or regulation.
Section 7. This act shall become effective on October
1, 2024.
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