If Washington can't / won't regulate gun sales. ... can banks?

[The Big Ragu]

How Banks Could Control Gun Sales if Washington Won’t

I looked and didn't see this discussed. I apologize if it is right under my nose and I am missing it. ... Busy day. I am not putting this in the politics thread. I hope that doesn't turn out to be a bad choice.

I thought it was an outstanding Dealbook by Andrew Ross Sorkin.

His premise is that. ... legislators have shown little interest in limiting sales of various guns and assault weapons. But what if the finance industry decided it wanted to? Credit card companies, such as Visa, Mastercard, AMEX, credit card processors such as First Data and banks such as Chase and Wells Fargo could cut off sales via credit cards. It would probably have a dramatic effect. PayPal, Square, Stripe and Apple Pay already have policies in place that disallow their services to be used for the sale of firearms.

He points out that credit card companies already put limits on what you can buy (which is their right, they are lending you money). For example, just this month Chase, Citibank and BofA banned the use of their credit cads to buy Bitcoin. Which sets up this odd situation by which you can use their credit cards to buy an AR-15 semiautomatic rifle (the kind used in multiple school shootings). ... but you can't buy cryptocurrencies.

I really love this idea, and I hope that it gains traction and there is a grassroots movement to get those companies to pay attention. It may not entirely stop the sales of those guns, but it would create a significant speed bump.

 

[Azrael]

Read that yesterday and thought it was a terrific idea. Thanks for posting it here.

 

[Inky_Wretch]

You might not be able to buy a firearm with Apple Pay, but you can use it to buy ammo.

Also, too, many folks use cash to buy firearms because they fear the tracking ability on credit card purchases.

 

[swingline]

That's an interesting question, Ragu. But how does that work with gun shows and online gun auctions, where tons of guns are bought and sold every year? I've seen military grade rifles go for thousands of dollars in online auctions, but does the credit card company really know what was purchased, or is it just general merchandise?

 

[QYFW]

Yes, let’s have banks regulate morality. I’m sure that will work out wonderfully. This is an incredibly stupid and shortsighted idea.

I’m old enough to remember when banks were evil. Now they’re gonna protect us.

Mind-blowingly stupid.

 

[The Big Ragu]

That's an interesting question, Ragu. But how does that work with gun shows and online gun auctions, where tons of guns are bought and sold every year? I've seen military grade rifles go for thousands of dollars in online auctions, but does the credit card company really know what was purchased, or is it just general merchandise?

This isn't a business I am that familiar with, so take this for what it is worth. But logistically. ... anyone who accepts credit cards signed a merchant agreement. Those agreements mostly set the pricing terms -- how much of a percentage you have to pay on each transaction. I would bet those agreements can also be designed (and might already be) to put terms on the actual commerce. They could have something in there prohibiting sales of certain items via card.

Sure, some gun sellers might operate in breach of those agreements, and many might get away with it. But at least it would put a mechanism in place for how the card processor can cut them off and even hit them for financial damages if they get caught.

 

[Jake_Taylor]

Yes, let’s have banks regulate morality. I’m sure that will work out wonderfully. This is an incredibly stupid and shortsighted idea.

I’m old enough to remember when banks were evil. Now they’re gonna protect us.

Mind-blowingly stupid.

But the financial institutions already do. They just haven't chosen to go all the way on guns yet.

Isn't this letting the market dictate it? The right-leaning side of me actually kind of digs it.

 

[The Big Ragu]

But the financial institutions already do. They just haven't chosen to go all the way on guns yet.

Isn't this letting the market dictate it? The right-leaning side of me actually kind of digs it.

I agree with you.

This is not "regulating morality." These are businesses. Any business is (and should be) free to decide WHAT business it wants to be in. This is no different than CVS deciding it wasn't going to sell cigarettes anymore. They aren't regulating morality. They are making a decision related to their business (conceivably this could be a great PR decision that boosts business) and what kind of commerce they want to do. That's their right.

 

[QYFW]

Yes, using financial institutions to sanction American citizens with whom you disagree is not at all problematic.

At some point, people who latch on to any idea that sounds good in the moment are going to realize that bad ideas (and policies) don’t discriminate. WGACA

 

[playthrough]

I'd love for something to work to cut off gun sales, but I don't think this is it. As someone said, cash is still king for those who are buying with evil intent. And if a guy goes into a respectable gun shop and buys a $1,000 hand-carved gun rack, does the credit card block that too, thinking the buyer's getting a semi-automatic? Doesn't sound fair to the buyer or seller.

 

[The Big Ragu]

Nobody would be"using financial institutions to sanction American citizens." This isn't the government telling those businesses how they have to operate or who they can do business with.

It would be those businesses freely (and on their own) making a business decision for themselves -- which is the right of anyone. As I said, it's no different than CVS deciding they weren't going to sell cigarettes anymore. They weren't sanctioning people. They simply decided what kind commerce they want to do and what kind they don't want to do.

 

[QYFW]

 

[TheSportsPredictor]

Credit cards have already stopped accepting payments for gambling sites and marijuana dispensaries. They could stop use for guns.

 

[The Big Ragu]

I'd love for something to work to cut off gun sales, but I don't think this is it. As someone said, cash is still king for those who are buying with evil intent. And if a guy goes into a respectable gun shop and buys a $1,000 hand-carved gun rack, does the credit card block that too, thinking the buyer's getting a semi-automatic? Doesn't sound fair to the buyer or seller.

They would likely not sign any merchant agreement with any shop that sells guns. So if you have a shop that sells guns. ... you'd have a problem finding a bank and processor that will process credit card transactions for you.

The actual hold up to this would likely actually be Walmart, which doesn't sell semi-automatic rifles apparently, but does a ton of gun sales and has the leverage to exert pressure on the banks, credit card companies and processors to back off of an idea like this (because of how much business Walmart gives them).

 

[Jake_Taylor]

Credit cards have already stopped accepting payments for gambling sites and marijuana dispensaries. They could stop use for guns.

This was going to be my next question.

 

[Inky_Wretch]

The actual hold up to this would likely actually be Walmart, which doesn't sell semi-automatic rifles apparently, but does a ton of gun sales and has the leverage to exert pressure on the banks, credit card companies and processors to back off of an idea like this (because of how much business Walmart gives them).

And Bass Pro Shops, Academy Sports, ****'s Sporting Goods and Gander Outdoors.

 

[ThomsonONE]

Banks don't like Bitcoin because it directly threatens their business. Guns don't.

Having corporations decide what is acceptable/unacceptable for society is as undemocratic and dangerous an idea as I've heard in a long while.
Lets have banks refuse to pay for abortions, or birth control, or alcohol, or certain types of books, films etc. What could go wrong?

 

[playthrough]

Credit cards have already stopped accepting payments for gambling sites and marijuana dispensaries. They could stop use for guns.

I've read how the marijuana dispensaries in Colorado have to spend money out the wazoo on security because it's an all-cash biz. So a gun shop that only can take cash ... maybe there can be a guy out front guarding it with a grandfathered semi-automatic.

 

[Jake_Taylor]

Credit cards are borrowed money, not one's own funds. Nobody is suggesting you couldn't withdraw your own cash from the bank. But I think it's perfectly reasonable if Citi doesn't want to float somebody 10 grand to buy an arsenal for the next Vegas concert attack.

 

[YankeeFan]

The actual hold up to this would likely actually be Walmart...

The actual hold up to this would likely actually be... the banks’ customers.

I hope they try this. Seriously.

The reaction would be swift.