Some in the finance industry responded to a steady stream of mass shootings by putting harsher restrictions on merchants who sell guns. As gun-control advocates continue to apply greater pressure on banks and lenders to help them restrict gun sales, it could get even worse.
Steps Banks and Lenders Have Taken
For years, payment aggregators, PayPal, Square, Stripe, and digital wallet, Apple Pay, have prohibited merchants that sell firearms from using their services. In March, Citigroup announced that it would prohibit any new gun retailers to sell firearms to people who have not passed background checks or to those who are younger than 21. Additionally, Citigroup barred sales of bump stocks and high-capacity magazines. The bank also stated it would try to move away from working with current clients that did not change their policies. In May, Bank of America announced it would stop lending money to manufacturers of military-inspired firearms, such as AR-15-style rifles, that civilians can use. Later, BlackRock, the world’s largest asset manager, announced it would start offering a new line of investment funds that did not include firearm producers or retailers that sell guns. Though none have taken any steps to date, there also has been talk of credit card brands attempting to restrict gun retailers, possibly similar to the way credit card companies banned cryptocurrency purchases.
If the gun-unfriendly climate continues, merchants will find it even more difficult to get an online firearm merchant account. Without an account, a merchant cannot accept debit or credit card payments.
Potential Political Changes
A partisan shift also may impact firearm businesses.
After Trump took office, his administration reversed Operation Choke Point. The 2013 Obama administration initiative gave the Department of Justice broad power to track down gun merchants and other high-risk businesses that were engaged in fraudulent activities through banks and financial institutions. With the government’s help, these businesses were forced to close because banks denied them merchant account and credit card processing services.
If the Democrats sweep both the House or the Senate in the November midterm elections, it would not be surprising for the federal government to pursue another Operation Check Point or similar initiative.
With the prospect of tighter regulations and traditional lenders finding ways to choke the firearm industry, online firearm merchants will need to turn to third-party lenders and merchant service providers if they want to continue to operate.
eMerchantBroker.com (EMB) caters to high-risk businesses and offers a quick, streamlined online application process for obtaining an online firearm merchant account. Also, EMB works with businesses that have no credit or poor credit and those that have had merchant account terminated in the past.
Critics of using the finance industry to influence gun sales might argue that such a move would be discriminatory against gun retailers. But gun sellers are not a protected class, like age, race, gender, religion or even political affiliation. This would be a strictly commercial decision.
Another critique is that it is impossible to prevent every shooting, no matter how guns are restricted. And the banks’ actions would affect millions of their own law-abiding customers, effectively dictating what they can and cannot buy.
he most troubling aspect of having the finance industry try to restrict gun sales is that it would push the most dangerous guns into an untraceable world where sales would depend on cash. That’s true. All things considered, though, it would make it considerably harder to even find such guns.