NYC Public Pension Funds Urge Credit Card Company Transparency Regarding the Identification of Sales at Gun and Ammunition Stores

 

Mastercard and American Express urged to report on their decision-making for the creation of a new merchant category code that would identify purchases made at standalone gun and ammunition stores

 Today, New York City Comptroller Brad Lander, Mayor Eric Adams and trustees of the New York City Employees’ Retirement System, Teachers’ Retirement System, and Board of Education Retirement System announced the filing of a shareholder proposal at Mastercard and American Express, two of the world’s largest credit card issuers. The proposals ask the boards of both companies to assess and publicly report to all investors on their oversight of management’s decision-making regarding any application to the International Organization for Standardization (ISO) to establish a merchant category code (MCC) for gun and ammunition stores. 

The filing of this proposal, which is accompanied by a letter from the City’s Pension Funds, jointly with the California State Teachers’ Retirement System (CalSTRS), to American Express, Mastercard and Visa, comes ahead of a meeting of the ISO this Fall, which is responsible for maintaining MCC guidelines. The three City pension systems and CalSTRS own 1.74 million combined American Express shares valued at approximately $241 million; 2.6 million combined Mastercard shares valued at approximately $834 million; and 4.8 million combined Visa shares valued at approximately $951 million as of June 30, 2022.

“Gun violence continues to ravage our nation and communities across our city. As fiduciaries, we have a responsibility to minimize risks of harm that could negatively impact the companies in our portfolio. Establishing a merchant category code to identify purchases from gun retailers could do just that by preventing gun crimes and saving lives. Unfortunately, the credit card companies have failed to support this simple, practical, potentially lifesaving tool. The time has come for them to do so,” said Comptroller Brad Lander.

“When it comes to guns falling into the wrong hands, we must find upstream solutions before we’re faced with downstream consequences — because downstream consequences are lost lives. When you buy an airline ticket or pay for your groceries, your credit card company has a special code for those retailers. It’s just commonsense that we have the same policies in place for gun and ammunition stores. I’m proud to join Comptroller Lander and our partners at the state level to call for this important policy change,” said Mayor Eric Adams. 

An MCC is a four-digit number that financial institutions use to identify businesses by the types of goods or services sold there. Currently, nearly every category of business is issued a specific MCC, from clothing stores and transportation providers, to very specific types of businesses such as glassware stores. However, standalone gun and ammunitions stores are a notable exception.  

The creation of a new code would be an initial step that would enable financial institutions to detect and report suspicious activity related to gun purchases that may be used for criminal purposes (e.g. unusually large purchases at a gun and ammunition retailer over a short period of time or multiple purchases at multiple retailers). This could be accomplished without limiting or regulating gun sales or creating any additional burden to their internal reporting systems.

Shareholders are owed transparency on a company’s stance on issues that could threaten long-term value, including by ignoring or failing to mitigate risks. The shareholder proposal specifically requests a report that would cover American Express and Mastercard’s governance of MCC standards, and disclose and explain the justification for their position on any applications to create an MCC for gun and ammunition stores.

The trustees of the relevant systems are as follows:

New York City Employees’ Retirement System (NYCERS): New York City Comptroller Brad Lander; Mayor Eric Adams’ Representative Preston Niblack (Chair); New York City Public Advocate Jumaane Williams; Borough Presidents: Mark Levine (Manhattan), Donovan Richards (Queens), Antonio Reynoso (Brooklyn), Vito Fossella (Staten Island), and Vanessa L. Gibson (Bronx); Henry Garrido, Executive Director, District Council 37, AFSCME; Tony Utano, President Transport Workers Union Local 100; and Gregory Floyd, President, International Brotherhood of Teamsters, Local 237.

Teachers’ Retirement System (TRS): New York City Comptroller Brad Lander; Mayor Eric Adams’ Appointee Bryan Berge; Chancellor’s Representative, Benjamin Schanback, New York City Department of Education; and Debra Penny (Chair), Thomas Brown and David Kazansky, all of the United Federation of Teachers.

Board of Education Retirement System (BERS): Schools Chancellor David C. Banks, Represented by Ben Schanback; New York City Comptroller Brad Lander’s Representative Alison Hirsh; Mayoral: Vasthi Acosta, Marjorie Dienstag, Gregory Faulkner, Sheree Gibson, Dr. Angela Green, Kyle Kimball, Anthony Lopez, Alan Ong, Gladys Ward, Karina Taveras; Thomas Sheppard (CEC); Geneal Chacon (Bronx), Tazin Azad (Brooklyn), and Kaliris Salas-Ramirez (Manhattan); and employee members John Maderich of the IUOE Local 891 and Donald Nesbit of District Council 37, Local 372.