The Federal Firearm Licensee Act significantly overhauls regulations for firearm dealers by mandating stricter physical security, enhanced inventory tracking, electronic recordkeeping, increased fees, and new enforcement powers for the Attorney General.
Richard Durbin
Senator
IL
The Federal Firearm Licensee Act significantly overhauls regulations for firearm dealers by mandating stricter physical security, requiring quarterly inventory checks, and increasing associated licensing fees. The bill also repeals outdated restrictions on ATF data sharing and establishes new compliance and recordkeeping standards, including mandatory video surveillance for sales. Furthermore, it introduces new licensing and operational requirements for online firearm transfer facilitators.
Federal Firearm Licensee Act Doubles Dealer Fees, Mandates Surveillance, and Ends Immediate Appeal Rights
The new Federal Firearm Licensee Act completely rewrites the rulebook for gun dealers, manufacturers, and importers, known as Federal Firearm Licensees (FFLs). This comprehensive bill mandates massive changes to security, record-keeping, and compliance, while also creating a new class of licensed entity: the online "facilitator." If you own a gun store, sell firearms online, or are simply concerned about government oversight, this bill is a major shift.
The core of the bill is simple: ramp up accountability and data collection. It does this by repealing old restrictions that limited the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) authority, such as limits on centralizing records and the quick destruction of background check data (SEC. 25). It also makes a big change to the intent standard for violations, lowering it from "willfully" (meaning deliberately breaking the law) to just "knowingly" (meaning you were aware of your actions, even if you didn't mean to violate a specific rule) (SEC. 22). This makes it much easier for the government to penalize dealers for mistakes.
The Security and Surveillance Price Tag
For every licensed dealer, the cost of doing business is about to jump. First, the bill doubles most federal licensing fees. For a standard dealer or manufacturer, the initial license fee goes from $1,000 to $2,000, and the renewal fee doubles from $50 to $100 (SEC. 13). This cost increase hits every FFL, regardless of size.
More significantly, all FFLs must now submit detailed physical security plans when applying for or renewing a license. The Attorney General is required to mandate specific security measures, including locked metal cabinets, fireproof safes, security systems, video monitoring, and security gates (SEC. 5). If you’re a dealer selling to unlicensed individuals, you must install video surveillance with sound recording in all sales areas and keep the footage for at least 90 days. You also have to post signs announcing the surveillance (SEC. 7).
Inventory Checks and Instant Shutdowns
Compliance gets much tougher. Dealers must now conduct a physical inventory check every quarter and report any lost or stolen firearms immediately to the ATF and local police (SEC. 6). If you fail to submit the required annual compliance certification, the Attorney General can hit you with a civil penalty of up to $5,000 and suspend your license (SEC. 5).
Perhaps the most immediate threat to a dealer's livelihood is the change to the revocation process. Currently, if your license is revoked, the effective date is automatically paused while you appeal. This bill eliminates that automatic stay (SEC. 14). Now, if the ATF decides to revoke your license, they can shut down your business immediately unless you can prove "good cause" for a delay. This means an administrative decision could put a dealer out of business before they even get a chance to make their case in court.
The Digital Marketplace Gets Licensed
This Act creates a whole new regulatory category: the "facilitator," defined as anyone running a commercial marketplace for buying, selling, or transferring firearms (SEC. 3). If you run an online platform for gun sales, you now need a license and must pay a $1,000 annual fee (SEC. 20). Facilitators must ensure that every transfer goes through a licensed dealer for a background check. If a licensed facilitator knowingly allows a transfer without that required background check, they face penalties up to 10 years in prison if the gun is used in a violent crime (SEC. 20).
More Data, More Scrutiny
The bill aggressively expands the government's access to firearm transaction data. It requires the ATF to create and maintain national electronic, searchable databases for all FFL records (SEC. 7). While the law prohibits searching these databases using personal identifying information without a warrant, it allows the National Tracing Center remote access to search by date, license number, and firearm details like serial number and caliber.
In addition, the bill creates a "high-risk" dealer category (based on criteria like reporting a lost gun or having multiple traced crime guns). These high-risk dealers will now face annual inspections, while non-high-risk dealers will be inspected once every five years (SEC. 11). The Attorney General also gains new mandatory authority to deny a license or renewal if they believe it would put "public safety at risk" or if the applicant is deemed "unsuitable," adding a vague standard to the licensing process (SEC. 12).