United Gun Shop, a federally licensed firearms dealer in Rockville, Maryland, filed a lawsuit Thursday against Capital One and payment processor Melio Payments, alleging the companies unlawfully terminated its access to bill payment services by classifying the business as operating in a 'prohibited' or 'restricted' industry.

The complaint, filed in a Maryland court, details how the shop had successfully used Capital One's platform since December 2024 for business payments. Issues arose in March 2025 when some transactions failed. After a meeting with Capital One on April 11, 2025, where representatives assured the shop it was not prohibited and had violated no terms, Melio sent a message three days later stating the account belonged to a prohibited industry and was blocked from future payments. 'There are times when we don’t catch it in time, but it appears that your account has been blocked from making future payments, as it appears to belong to one of our prohibited industries,' the message read.

In March 2026, Capital One followed up, disabling the account entirely because it could not verify eligibility, citing the firearms business as restricted. Owner Jonathan Bennett said the abrupt cutoff caused about $75,000 in damages and business disruption. 'We were shocked when Capital One abruptly stopped processing our payments without any clear explanation,' Bennett stated.

The suit accuses the defendants of breaching contract, violating Maryland consumer protection laws, and engaging in commercial disparagement. Melio called the claims meritless and vowed to defend. Capital One did not comment.

This incident follows a previous lawsuit by Maryland and D.C. attorneys general against United Gun Shop and two other dealers for alleged straw purchases leading to gun trafficking. A Maryland court dismissed those claims in February 2025.

The National Rifle Association, through Executive Director of its Institute for Legislative Action John Commerford, has long criticized banks like Capital One for debanking legal firearms businesses. In December 2025, NRA-ILA highlighted Office of the Comptroller of the Currency findings that Capital One and other major banks restricted services to firearms dealers between 2020 and 2023 based on reputational risks tied to gun violence debates.

President Trump addressed such practices with an August 2025 executive order, 'Guaranteeing Fair Banking for All Americans,' prohibiting denials of service based on political views or lawful activities. Federal regulators have since proposed rules to eliminate 'reputation risk' guidance used to justify debanking.

Consumers' Research Executive Director Will Hild called the case evidence of political discrimination. 'Capital One got caught red-handed debanking a law-abiding American business,' he said.

NRA-ILA has urged continued federal scrutiny, noting the OCC review of nearly 100,000 complaints and thousands of bank documents. The group views cases like United Gun Shop's as proof that banks continue discriminatory practices despite regulatory pressure.

This lawsuit underscores ongoing tensions between the firearms industry and financial institutions amid Trump administration efforts to curb debanking. Further OCC findings are expected.