FFLs, Politics and Regulation

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Historically, the number of federal firearms license holders has roughly corresponded to general political and social trends within the US When there’s a high demand for firearms, the number of FFLs goes up. At certain points in time, politicians have sought to reduce the number of FFLs for this very reason. But if Americans are anything, they’re resourceful. Despite regulatory roadblocks thrown up and the bureaucrat machinations of the ATF, people will demand more firearms, especially when they believe certain models or classes of guns are in danger of being banned . . .

In a comprehensive report, Brandon Maddox of FFL123.com has taken a look at these trends, examining the history of the laws impacting FFL dealers and how changes in the social and political landscapes in the US have impacted the number of FFL holders across the country – both positively or negatively – from 1968 to the present.

Case it point: the precipitous drop in the number of FFLs starting in the early 1990s when the Clinton administration cracked down on dormant licenses and raised application fees. Maybe most interesting is the spike in the numbers of manufacturers that have increased 250% over the past decade.

To read the full report click here.

comments

  1. avatar mdc says:

    Case in point, Russian Arms and Ammo. This Ukraine business isn’t helping.

  2. avatar NotoriousAPP says:

    Please don’t ever do a linear fit to data like that again. I feel like I got dumber by just looking at that.

    1. avatar David C says:

      Agreed. That trend line is an abomination.

    2. avatar Curtis in IL says:

      Yeah there’s all kinds of fail in that linear trend line, but in fairness, the graph comes from Mr. Maddox, not Mr. Zimmerman.

    3. avatar Gene says:

      Agreed. Please don’t… For the children.

    4. avatar RandallOfLegend says:

      time for a 10th order polynomial fit, then we can extrapolate!

      1. avatar Bill says:

        read the pdf, he later shows a polynomial fit that is very encouraging

        1. avatar Business Intelligence Analyst says:

          An nth order polynomial curve would not be useful here, actually, because there are at least two distinct trends in the data. A better analysis would have split the chart at the 1992 mark and fit two before/after opposing models, showing the linear rise and exponential decline in the number of FFLs over time.

  3. avatar Dyspeptic Gunsmith says:

    The single biggest issue that caused the drop in the number of FFL’s was the zoning requirement. Lots of “kitchen table” FFL’s were doing business out of their houses, and the Clinton administration put in a requirement that FFL applicants have zoning that permitted business activity in the address listed on the FFL.

    I had to get a “conditional use” zoning variance for my business, which was easily and readily granted (this is Wyoming, after all), but still, it took four months to accomplish. If you’re applying from a non-business/non-industrial address for a FFL, and you don’t have your zoning in order, you’re not going to get a FFL.

    The other thing that most people who were not around then don’t remember is this: The trade group of “stocking gun dealers” backed this regulatory change by the Clinton administration. The boys and girls in the “stocking gun dealer” group didn’t like the competition they had been suffering from the kitchen table dealers, selling at slim mark-ups to their friends.

    Lastly, remember that the Brady Act took effect in 1994, and suddenly FFL’s in all states had to start doing NICS checks. I know at least two FFL’s who hung it up at that point – they just didn’t want to go through the hassle and liabilities of dealing with the NICS system and the background check issue.

    1. avatar Rad Man says:

      I operate out of my house in Massachusetts and have a business license along with zoning approval for my 100% internet auction business. As I don’t have a commercial location, I can’t get retail permitting through the state nor sell retail in the Commonwealth. The end game is I never meet a buyer, transfer to other FFLs only, and never do NICS checks. And make just about zero money. Still, it’s fun and I do get pretty good discounts from wholesalers and manufacturers. Hopefully, it will be more profitable in the future.

    2. avatar Avid Reader says:

      Speed goats don’t care much about zoning.

      1. avatar Rad Man says:

        I’m not nearly cool enough to know what speed goat means.

  4. And of course there are FFL holders out there doing the gun community no favors when they refuse to accept a firearm shipment from a private party and refuse to provide a copy of their FFL for verification purposes.

    FUDDs and FFLs are a bad combination.

    1. avatar Matt Richardson says:

      Grrr. this

  5. avatar Jonathan -- Houston says:

    This really is a vital intersection of issues that I don’t hear the POTG broach often enough: background checks and the licensing of dealers. Granted, you can always buy from a private party without a background check, but not a new firearm. If you want brand new, it’s coming from a dealer. If you want it from out of state, it’s going through a dealer. Even if you want it used, unless you happen to find it locally, as in your city, not just your state, it’s probably going through a dealer, too.

    The FFL structure is the choke point of the firearms industry. The gun grabbers know this full well. That’s the real reason they push for so-called universal background checks. It has nothing to do with ensuring bad guys don’t get guns. They already get them, either by gaming the background check system itself or acquiring firearms by other means. No, the value of the background check requirement has nothing to do with keeping firearms out of criminals’ hands and everything to do with limiting firearms possession of law abiding citizens.

    Why? Because only the FFL’s can access the FBI’s NICS system to run the background check, that’s why. During the original “Assault Weapons Ban” bill debate in the early 1990s, the idea of allowing private citizens to access the contemplated instant background check system was proposed and rejected. The same happened as recently as 2013, too. If the gun grabbers were really oh so interested in ensuring that all firearms transactions underwent a background check, then why not allow private citizens selling a firearm to access the system? The reason is that they want to restrict transactions to the FFL’s and abolish private transfers of firearms altogether.

    If they can restrict all transactions to the FFL’s, then they can constrict the number of FFL’s themselves and throttle the industry at that bottleneck. How? Through licensing eligibility and maintenance requirements such as fees, record keeping mandates, physical security restrictions, ATF harassment, and the aforementioned zoning requirements. Through these measures, the federal government can reduce the number of firearms sales outlets, thereby both reducing the availability of firearms and increasing their pricing. That’s the real goal of so-called “universal background checks.” And it’s not conspiracy theorizing, either. For starters, it’s already been seen in the 1990’s. Second, there’s no other plausible explanation for the gun grabbers’ steadfast refusal to allow private citizens to access the NICS for private sales.

    The dirtiest little secret of all, though, is that many FFL’s would happily go along with universal background checks, too, as that would snuff out much of the legal private transactions business and drive much of it to the FFL’s. Whether it’s guys making pennies or corporations making millions, many of them would love to shut down the competition from private individuals selling their own firearms. We already see manufacturers themselves lament that they are their own biggest competitor, as firearms are durable goods and used firearms compete against new models from the same manufacturer. Shutting down legal private sales market would serve the interests of quite a few firearms industry players who aren’t necessarily concerned about your rights.

    1. avatar brentondadams says:

      Yup. The secondary private market is an outlet valve. Long may it continue.

    2. avatar CBI says:

      My wife and I have an FFL, and agree with all your points regarding it being a choke-hold. Fortunately, most of the “small” FFLs don’t support the “universal” background check idea. We sure don’t. One of our purposes of having an FFL is to assist newbies and hobbyists without breaking their wallets — and we’d be happy for the current requirement to go away and citizens to be allowed access to the NICS. That would entail some technical problems, but the FBI with the NICS has a heck of a lot better record than do the ATF, healthcare.gov, and the like.
      I think that one current push, however, should be for record retention(of 4473s) to be reduced to five years, with destruction required within two years of that date. That combined with some anti-registry enforcement legislation would be a good step forward.
      Anyway, if you find the FFL you’re currently using is behaving poorly: look around for another one. In much of the country there is some choice.

  6. avatar Anmut says:

    “Universal Background Checks For All!”

    “Okay, I’ll get an FFL and everything I buy and own is under super close scrutiny.”

    “No, that’s not what we mean.”

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