A Federal Firearms License (FFL) allows a person or company to manufacture, import and sell firearms. These gun dealers are required to keep records of all firearm sales and transfers for the Bureau of Alcohol Tobacco & Firearms (ATF). The ATF is allowed to inspect or request a copy of these records during the course of a criminal investigation. Gun dealers are also required to report the sale of two or more handguns to a person within five business days. It is known that a substantial number of these FFLs dealers engage in illegal gun sales or allow their guns to be stolen. Between 2008 and 2010 our ATF found that over 62,000 firearms were missing from licensee inventories with no record of sale. Between 2009 and 2011, it also identified over 16,000 firearms that had disappeared from the inventories of gun manufacturers without explanation. In 2020, Federal firearm licensees reported 12,981 guns lost or stolen in U.S. states and territories. A recent ATF study found that the policing of gun shops has been conciliatory, with the ATF often bending over backward to go easy on wayward dealers coast to coast, allowing guns to flow into the hands of criminals.

Licensed gun dealers are the original providers of all guns used in crime, with the exception of stolen guns or those straw purchased. In the mid 1990’s, ATF gun dealer reforms reduced the number of unethical weapons dealers in business. This coincided with a dramatic reduction in gun crime. Gun dealers who went out of business because of these federal reforms were found to have supplied about one-third of guns confiscated and traced by law enforcement agencies. This suggests that “leakage” from licensed gun stores significantly contributes to our crime rate. Federal law provides that persons “engaged in the business” of dealing in firearms must be licensed and conduct background checks on purchasers. Unlicensed sellers are not required to conduct background checks. The 2022 Safer Communities Act would make a minor change to the language that determines which gun sellers must obtain a license and conduct background checks. However, the loophole that allows unlicensed sellers to sell guns without conducting background checks would remain open.

A recent executive order by President Biden has asked the Justice Dept. to require all those engaged in the business of selling firearms to become federally licensed firearm dealers, and require them to run background checks before selling a gun. Attorney General Garland must also devise a plan to stop gun dealers whose licenses have been revoked or surrendered from continuing to sell firearms.

Proposed Legislation: Reintroduction of H.R.4271 - Keeping Gun Dealers Honest Act of 2021
Prospective Sponsor: Proposed Legislation: Reintroduction of H.R.4271 - Keeping Gun Dealers Honest Act of 2021

Pending Legislation: S.1826 - Keeping Gun Dealers Honest Act of 2023
Sponsor: Sen. Edward Markey (MA)
Status: Senate Committee on the Judiciary
Chair: Sen. Dick Durbin (IL)