A Maine law passed in 2024 bars banks from refusing to process lawful firearm sales based on how the transaction is coded—a protection most retail owners don't know exists.
Most retail owners assume their bank will process payment card transactions as long as the sale is legal. But firearms dealers have faced a different reality: some financial institutions have declined to process—or terminated accounts for—merchants in the firearms category, regardless of whether individual transactions were lawful.
Maine's LD1867, signed into law in 2024, directly addresses this problem with a provision that may be the most operationally critical protection in the bill for small business owners.
Under §1500-X, Subsection 3(B)(1) of LD1867, a financial institution may not refuse to process a payment card transaction at a firearms dealer solely because a firearms merchant category code (MCC) is or is not assigned to that business.
In plain terms: your bank cannot block a lawful sale or close your account based on your industry classification code alone. The code itself—the numerical tag that identifies your business as a firearms dealer—cannot be the reason for refusal.
This matters because merchant category codes are how payment processors sort businesses. A firearms dealer's code signals the industry to banks and card networks. Some financial institutions have used that code as a blanket reason to avoid the category altogether, treating the code itself as a risk factor rather than evaluating individual transactions on their merits.
The protection applies to any firearms dealer in Maine accepting payment cards. It covers gun shops, sporting goods retailers with firearms departments, and ammunition sellers—any business that processes card payments and operates lawfully under state and federal law.
The law protects the transaction processing itself. A bank still may decline a specific transaction for other legitimate reasons—fraud indicators, sanctions screening, or other standard underwriting criteria. But the merchant category code cannot be the sole reason.
LD1867 became effective January 1, 2025. Financial institutions are now bound by this restriction.
If your bank has previously cited your merchant category code as a reason to decline service or threatened account termination, you now have a legal basis to challenge that decision. The law creates an explicit prohibition—not a suggestion or best practice, but a legal requirement.
If you're opening a firearms retail operation or adding firearms to your product line, this law provides a layer of protection against blanket refusals based on industry classification. You still need to maintain compliance with all other banking requirements and regulations, but your business category alone cannot be the deciding factor.
For existing retailers facing payment processing challenges, this provision gives you grounds to push back with your financial institution or seek alternative processors, knowing Maine law is on your side.
The full text of LD1867 is available through the Maine Legislature's website. Retailers with specific questions about their banking relationships should consult with their financial institution or legal counsel.