New Fire Sale Act Immediately Halts Gun Transfers When Dealer Licenses Are Revoked

The aptly named Fire Sale Loophole Closing Act of 2025 is designed to slam the brakes on what happens when a Federal Firearms Licensee (FFL)—a licensed gun dealer—loses their license or is about to lose it. Basically, it stops dealers from dumping their entire inventory into the market or their personal collection the moment the government moves to shut them down.

The Instant Stop Sign for Inventory

Under this bill, the rules change immediately. The second the Attorney General (via the ATF) sends a written notice that they are revoking an FFL’s license or denying their renewal, the dealer can no longer transfer those business inventory firearms in a few key ways. They can’t move the guns into their personal collection, give them to an employee, or transfer them to certain individuals who might otherwise buy from them. This is the bill’s core mechanism for preventing a “fire sale” where inventory is quickly dispersed before the license officially expires. For the average person, this means that if an FFL is deemed unfit to operate, their inventory is immediately locked down, keeping those firearms within the regulated system.

The 30-Day Clock: What Happens After the License Dies

Once the license is officially revoked or expires, the dealer gets a 30-day window to clean house. During this time, they can transfer their remaining business inventory to anyone legally allowed to receive it. But here’s the kicker: after that 30-day period is up, they can only transfer those remaining guns to another person who holds a valid FFL. Think of it like this: after the grace period, the firearms must be absorbed back into the network of licensed dealers, preventing them from floating around without proper oversight. This provision (Section 3) is a clear attempt to ensure accountability for every firearm.

The Personal Collection Waiting Game

If a dealer manages to legally transfer a firearm from their business stock to their personal collection—say, before the revocation notice arrived—the bill adds a new restriction designed to prevent abuse. That dealer is banned from transferring that specific gun again for one full year after it enters their personal collection. This prevents a dealer from using their personal collection as a temporary holding tank to bypass the 30-day transfer rules and immediately resell the firearms as a private citizen. If you’re a dealer, this means you can’t just shift your stock and then immediately sell it at the next gun show.

Consequences and Clarity

This legislation isn't just about administrative rules; it has teeth. Anyone who knowingly violates these new transfer restrictions could face a fine, up to a year in prison, or both. Furthermore, the bill clarifies that Congress believes the ATF already has the power to oversee how FFLs shut down their businesses (Section 2). Crucially, the written notice of revocation sent by the Attorney General must now include the specific text of these new restrictions, meaning dealers can’t claim they didn’t know the rules had changed.