MASTERCARD INCORPORATED | Report on Mastercards' stance on new merchant category code at MASTERCARD INCORPORATED

Status
9.51% votes in favour
AGM date
Previous AGM date
Proposal number
7
Resolution details
Company ticker
MA
Lead filer
New York State Common Retirement Fund
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Conflict and/or violence
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Technology
Company HQ country
United States
Resolved clause
RESOLVED Shareholders request the Mastercard Incorporated Board of Directors issue a public report, omitting proprietary and privileged information, concerning its oversight of management’s decision-making regarding any application to the International Standards Organization (ISO) to establish a merchant category code (MCC) for standalone gun and ammunition stores. This report should cover Mastercard’s governance of MCC standards, as well as disclose and explain the justification for its position on any applications to create an MCC for gun and ammunition stores.
Supporting statement
As a financial institution, Mastercard must ensure its systems are not used for criminal purposes. A new MCC for gun and ammunition stores would allow banks to comply with their regulatory obligation to report suspicious purchasing activity associated with illegal activity,2 and credit card companies would be able to voluntarily file this information under existing reporting systems. This could be accomplished without limiting or regulating gun sales or creating any additional burden to internal systems.
Suspicious activity could include gun sales associated with diversion from legal to illegal markets, and purchasing behavior associated with mass shootings. Failure to act could lead to regulatory and reputational risk, including reputational risk associated with costly litigation.
Suspicious purchasing activity that could constitute reportable suspicious activity might involve the frequency and size of purchases, and the type of retailer. For example, the Aurora, Colorado movie theater shooter used a Mastercard issued to purchase $11,000 worth of weapons and military gear in the six weeks, including purchases at two standalone gun stores.1 One week before the mass shooting at the Pulse Nightclub, in which 49 people were killed and 50 injured, the shooter used a Mastercard (among others) to purchase more than $26,000 worth of guns and ammunition, including purchases at a stand-alone gun retailer.2
An application to create an MCC for gun and ammunition stores was twice denied. It has been reported that Mastercard pushed back on the application and that “credit card industry employees were part of an internal committee within ISO that recommended the application's rejection.”3Shareholders would benefit from transparency on how Mastercard’s Board of Directors is overseeing any final position taken on any MCC application for standalone gun and ammunition stores, and whether Mastercard is appropriately considering the risks inherent in failing to take action to report suspicious purchasing activity at these retailers.
We believe that failure to do so will result in lost lives, as well as regulatory, reputational, and litigation risks that may threaten long-term shareholder value.
We urge you to vote FOR this proposal.

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr For Considering the stunted adoption of the merchant category code (MCC) for gun and ammunition stores, despite numerous public commitments from the company, shareholders would
benefit from further information regarding clarified goals and progress towards implementing changes.
Rothschild & co Asset Management For
Kutxabank Gestion SGIIC SAU. Against

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