Gun policy's a job for government, not banks
There’s outrage all over the country. Deaths from firearms outpace those in other nations. Mass shootings awaken our national consciousness. The inadequacy of our government’s willingness to address these tragedies with legislation is evident by the lack of movement we see on any comprehensive firearm legislation.
Well-meaning people, tired of this inaction, look outside of government for change. But this is an error.
The suggestion that banks and payment networks should monitor or refuse to finance consumer purchases of legal firearms is a suggestion that banks take the law into their own hands. This is not only wrong from a practical standpoint (banks and payment networks aren’t great at law enforcement — they’re not supposed to be), it’s a step toward undermining the foundation of the rule of law upon which our nation stands.
Such proposals amount to a form of vigilante justice. If, as a society, we have decided that we no longer want to protect the ownership of certain types of weapons, we must work with our duly elected representatives to write and amend laws and decide how to reconcile that with the Constitution.
To be blunt, Aaron Ross-Sorkin, a New York Times financial columnist who has been vocal on these issues, should be calling his congresswoman and making sure that everyone who reads his column does the same. He should not suggest that I — and I mean me personally, as I was previously the head of U.S. Risk Services for Visa — should determine which gun purchases should be allowed or not, or should be reported as suspicious, or not.
At Visa, my role was to facilitate secure commerce. That meant that if a purchase was legal in the seller and buyer’s jurisdiction, it was my role to make sure the transaction happened quickly and safely. And lest there be any confusion about what was and is monitored, fraud, by definition, is not legal commerce.
A bank or payment network risk manager is responsible to a firm’s shareholders and its customers. The role of banks and the payments system is to allow a vibrant and flourishing legal marketplace with expanded access to capital, liquidity and security. A risk manager is taught to look for patterns in loss rates, in transaction anomalies and in consumer behavior. She is taught to deploy tools such as cyber technology and cryptography to secure transactions. She is taught to balance the needs of different sides of a two-sided network and help address them fairly.
She is not, however, taught how to reconcile what guns and which people come under the protection of the Second Amendment and which do not. She is not an expert in psychology who can determine the difference between a collector and a mass murderer stockpiling weapons. Most important, a risk manager is not an elected official.
No law grants bankers and payment network executives the right to act as de facto legislators. Deciding how our country keeps itself safe, what it values and who it protects is the role of the government. This is not opinion — it is clearly outlined in the Constitution. The solution to this problem, as discouraging and disheartening as it may seem, belongs with the government.
What’s more, there are a host of other lines of argument against having banks police transactions of legal commerce, including but not limited to the imperfect nature of SKU-level and merchant category code data, the invasion of the privacy of consumers making legal purchases and the slippery slope of what other legal, yet morally non-neutral purchases banks will be asked to monitor (alcohol, contraceptives, carbon-emitting vehicles?). Still, these are secondary concerns and remain so as long as we have a government whose role it is to determine what is and is not legal and what should and should not be legal.
While there may be fairly widespread agreement that there is a gun violence problem, there remains (even among reasonable people) significant disagreement over what the right solution is, how far the solution should go and to whom it should apply. These are important debates that should happen through the legislative process, not in the conference room of a corporation that no one elected.