The Delaware House Judiciary Committee on Oct. 12 voted to release House Bill 45, a measure that would require retail sellers of firearms and ammunition to be assigned—and for payment processors to use—a merchant category code (MCC) identifying those sales, proponents said. Committee members voted to release the bill from committee, with the chair announcing “6 votes, to release on House Bill 45.”

Proponents said the MCC is an existing four-digit industry code that banks and payment networks can use, alongside other transaction data, to detect patterns that may indicate trafficking or preparations for mass violence. Hudson Munoz, executive director of Guns Down America, testified that “merchant category codes are 4 digit numbers that banks assign to retailers” and that, after the International Organization for Standardization established an MCC for gun and ammunition retailers in 2022, banks could combine that code with transaction amount, frequency and location to identify suspicious patterns.

The bill’s sponsor and supporters said the tool is not a registry and would not single out ordinary purchasers. Liddy Ballard, identified in testimony as a witness supporting the bill, told the committee, “The merchant codes are not a registry. They don't act as a registry.” Ballard and Tracy Murphy, a coalition representative, said the policy is designed to help financial institutions’ existing fraud-detection systems surface unusual purchasing behavior for further review and, where warranted, referral to law enforcement.

Why it matters: supporters said MCC-based alerts were not available at the time of several past mass shootings and that, used properly by banks, the codes could give investigators additional leads. Murphy noted that, in national analyses, a small number of retailers account for a disproportionate share of crime-linked firearms recovered by investigators and said Delaware aims to add a tool to the state’s prevention toolkit.

Committee members pressed proponents on technical limits and scope. Munoz and other witnesses described a sample alert scenario used by some financial-transaction monitoring systems: a 60-day lookback in which a customer transacts at five or more distinct gun merchants and gun-merchant transactions total a substantial share of activity. At one point a witness cited a $2,500 aggregate threshold used as an illustrative example; other members referenced larger-dollar thresholds in later questioning. The transcript shows disagreement about a single uniform national threshold and several members urged amendments to clarify the reporting triggers.

Members also raised implementation questions about large sporting-goods retailers that sell firearms alongside other merchandise. Representative Lynn asked whether sales at Cabela's or Bass Pro Shops would be captured if the store’s point-of-sale terminal for guns is not separated from general retail registers. Munoz said the gun counter typically has its own point-of-sale terminal and that payment networks and retailers have mechanisms to separate categories; Liddy Ballard and Murphy said implementation details are still being worked out in states that recently enacted similar laws.

Several committee members sought clarity on who would be fined for noncompliance and who would be responsible for reporting alerts to Delaware authorities. Witnesses and DOJ counsel said enforcement language in the bill contemplates penalties for the violating entity and that the state Department of Justice supports the bill as a law-enforcement tool; the transcript records an exchange in which committee counsel and witnesses said fines could attach to the payment-card network or merchant acquirer, and that banks have two established channels for reporting suspicious activity—filing Suspicious Activity Reports (SARs) with the Financial Crimes Enforcement Network (FinCEN) and direct institutional relationships with law enforcement.

Opponents and public commenters said the bill threatens privacy, burdens small retailers and could be ineffective against criminals who use cash, pawn shops, online purchases that route through out-of-state accounts, or build weapons or ammunition at home. Paula Johnson, a Smyrna resident, told the committee, “This bill penalizes us,” and virtual and in-room commenters argued it would treat law-abiding gun owners as suspects. Industry representatives, including an attorney speaking for the National Shooting Sports Foundation, said the bill as written would sweep accessories into scope, could impose heavy fines on small businesses and lacks clarity about remedies for retailers falsely flagged.

Committee action and next steps: the chair announced the committee would release the bill and consider amendments, including a suggested change to limit the requirement to purchases made in Delaware. Witnesses said California and New York recently adopted related implementation measures and that some of the technical questions remain in implementation phases elsewhere. The record shows the committee directed further work on definitions, thresholds and the bill’s interplay with state privacy law.