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Bill Summary · HB 38

Summary — HB 38: Second Amendment Financial Privacy Act (2025)

This summary describes the North Carolina House Bill 38 (2025 session), titled the “Second Amendment Financial Privacy Act.” It adds a new Article 52 to Chapter 66 of the General Statutes to prohibit certain payment‑card tracking of lawful firearms commerce and to provide enforcement mechanisms.

Purpose

The bill seeks to protect consumers’ financial privacy and to prevent the creation or use of payment‑card identifiers or registries that would identify (and allow tracking of) purchases from firearms merchants or ownership of firearms. Sponsors cite concerns that a merchant category code for firearms could chill lawful exercise of the right to keep and bear arms.

Key provisions

  • Prohibitions
    • Payment card networks are prohibited from using or permitting a “firearms code” to identify transactions involving a firearms merchant located in the State.
    • Payment card networks may not knowingly maintain a record of North Carolina residents who own firearms.
    • Payment card networks may not discriminate against firearms merchants solely because a firearms code is assigned (or not assigned).
  • Definitions (notable)
    • “Firearms code”: any code/indicator identifying (a) that a merchant is a firearms merchant or (b) that a payment involves a firearm or ammunition.
    • “Firearms merchant”: a person physically located in the State engaged in lawful sale/trade of firearms or ammunition.
    • “Payment card network”: entities providing the proprietary services/infrastructure to route authorization, clearance and settlement for branded debit/credit cards (excludes banks and federally insured credit unions).
  • Enforcement and remedies
    • Attorney General may investigate, hold hearings, and assess a civil penalty (third/engrossed edition: up to $5,000 per violation).
    • Private cause of action: firearms merchants, purchasers whose transaction records include a firearms code, and individuals with firearm‑ownership records may sue.
    • Remedies available to private plaintiffs include injunctions, statutory damages of $10,000 per wrongful instance, and costs/attorney’s fees.
    • Statute of limitations: lawsuits must be commenced within 3 years after discovery of the violation.

Who is affected

  • Directly: payment card networks that route/process card transactions in North Carolina; firearms merchants physically located in the State; cardholders who purchase firearms or ammunition.
  • Indirectly: banks/processors that rely on network data, merchant acquirers, other financial service participants, and state enforcement resources.

Potential impacts and considerations

  • Compliance: card networks and processors would need to avoid use of any firearms‑specific merchant identifiers for NC transactions and ensure they are not maintaining firearm‑ownership registries covering NC residents.
  • Commercial effects: payment processors might change merchant classification or contracting practices in NC; some merchants may face operational friction if networks respond by restricting services, despite the bill’s anti‑discrimination provision.
  • Litigation risk: the bill authorizes significant statutory damages and private suits, which could produce litigation and compliance costs.
  • Enforcement scope: the Attorney General gains investigatory authority; the per‑violation penalty ($5,000) and $10,000 private statutory damages create monetary exposure even for inadvertent uses.
  • Preemption and legal risk: potential federal preemption, interstate data‑flow, or free‑speech/commerce‑clause challenges could arise; the bill excludes federally insured banks and credit unions from the definition of “payment card network.”

Procedural status and effective date

  • Introduced during the 2025 legislative session (first reading Feb. 2025; committee activity in spring 2025). The bill text provides for an effective date of October 1, 2025 (if enacted).
  • Current status in the provided materials: recorded as “Regular Message Sent To Senate.” (Check the State Legislature website for the latest status and any amendments.)

If you want, I can:
- Produce a one‑page stakeholder brief targeted to payment processors or firearms retailers;
- Compare this bill to similar statutes in other states; or
- Draft a short analysis of likely constitutional or federal preemption issues.

Compiled from official sources — confirm details with the bill’s official record.

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