Proposed Gun Dealer Act Triples Inspections, Raises Penalties to 5 Years, and Removes 'Willful' Intent Requirement

The “Keeping Gun Dealers Honest Act of 2025” is exactly what it sounds like: a major federal shake-up aimed squarely at licensed gun dealers, manufacturers, and importers. If you’re a regular person, this bill doesn’t affect your ability to buy a firearm, but it radically changes the compliance landscape for the businesses that sell them. The core of this legislation is simple: ramp up federal scrutiny, make the rules tougher to break, and significantly increase the consequences when they are.

The Inspection Triple Threat

Right now, federal law limits the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to inspecting a single licensed dealer once per year. This bill (Sec. 2) changes that limit from one inspection to three inspections per year. For a small-town dealer, this means the federal government can now show up to check inventory and records up to three times as often. This increased frequency is clearly aimed at catching compliance issues faster, but it also means a substantial increase in the administrative burden on licensed businesses.

Paperwork Mistakes Just Got Expensive

This is where the bill gets serious about accountability. If a dealer commits a serious recordkeeping offense that ends up facilitating illegal gun sales or trafficking, the penalties skyrocket (Sec. 4). We’re talking up to 10 years in prison for paperwork errors that aid illegal activity. To put that in perspective, imagine a dealer accidentally misfiles the paperwork for a sale, and that gun later turns up in a crime traced back to them. If the Attorney General decides that error helped the gun move illegally, the dealer faces a decade behind bars.

Beyond criminal penalties, the Attorney General gains major new civil enforcement tools (Sec. 5). For any violation of the Gun Control Act—even minor ones—they can suspend or revoke the license, or hit the dealer with a civil penalty of up to $10,000 per violation. This provision also makes it mandatory for dealers to have secure gun storage or safety devices available for sale, making the failure to do so a finable offense. For a small business owner, that kind of fine could be crippling.

The 'Willful' Standard Disappears

One of the most significant, and potentially controversial, changes is found in Section 10, which deals with liability standards. The bill removes the word “willfully” from several key parts of the U.S. Code related to firearms offenses. Why does this matter? Because proving a violation was “willful” means prosecutors have to show the dealer knew they were breaking the law or acted with deliberate disregard. By removing that word, the standard for liability is lowered.

This means a dealer could potentially face severe penalties—including the new five-year maximum prison sentence for license violations (Sec. 3)—for actions that were merely negligent or accidental, rather than intentional. This broadens the scope of what the government can prosecute, making it much easier to establish guilt for non-compliant dealers.

The Public Safety Catch-All

Finally, the bill gives the Attorney General a new, broad power when issuing licenses (Sec. 9). They can now deny an application if they decide that granting the license would create a “danger to public safety.” This is a massive expansion of discretionary power. While the intent is clearly to keep licenses out of the hands of unsuitable people, the term “danger to public safety” is vague enough that it could lead to arbitrary denials. The bill also shortens the time a dealer can operate after a felony conviction (Sec. 6). Instead of waiting for all appeals to finalize, the license is terminated the moment the dealer is convicted, even if they plan to appeal the verdict later. To handle all this new enforcement, the ATF is authorized to hire at least 80 new employees (Sec. 7), acknowledging that these rules require real manpower to enforce.