VPC Focuses on Drop in FFLs As Gun Sales Remain Constant
April 1, 2006

by Joseph P. Tartaro
Executive Editor

In 1992, the Violence Policy Center (VPC) issued an anti-gun study entitled “More Gun Dealers Than Gas Stations.” That study claimed that the number of Americans who then held Type 1 federal firearms licenses (FFLs) outnumbered gas stations 245,000 to 210,000.

The main target of the VPC report was the so-called kitchen-table or part-time gun dealer that the anti-gunners illogically linked to an illegal trade in firearms. They ignored sociological studies of a comparable era which proved that few criminals obtain their firearms from licensed dealers—or even at gun shows, another bugaboo of the anti-gun community.

However, coming as it did during the Clinton Administration, which was more than receptive to new restrictions on firearms owners and the firearms industry, the VPC study led to changes in federal regulations and law. At the direction of the White House, the Bureau of Alcohol, Tobacco and Firearms (ATF) began denying new licenses or license renewals to people who could not demonstrate enough firearms sales to qualify as being “engaged in the business.”

Then, as part of the 1993 Brady Act, the license fees for new FFLs were increased from $10 a year to $200 for the first three years and $90 for each three-year renewal period, and applicants for new FFLs or renewals were required to notify the chief law enforcement officer of their community of their intent to apply for a license.

The next year, with passage of the Clinton gun ban, applicants were required to submit photographs and fingerprints with their FFL applications, as well as proof that their businesses complied with all state and local laws, including zoning laws.

While the FFL fee increase may have contributed some to a decline in the number of licensees, the zoning laws probably accounted for the greatest reduction in their number.

Relevance
Back in 1992, no one seemed to question the relevance of an equation linking the number of FFLs to gas stations, and apparently no one is giving that much thought today, as the VPC issues an update on its FFL vs. gas station study. The new study, issued in March, is entitled “An Analysis of the Decline in Gun Dealers: 1994 to 2005.” As with most VPC activities which lack grassroots support among the American people, the new study was largely funded by grants from several foundations, including The Herb Block Foundation, the David Bohnett Foundation, the Joyce Foundation and the John D. and Catherine T. MacArthur Foundation.

Needless to say, the latest VPC report was greeted with much joy in the anti-gun community.

GunGuys.com noted:
“A word of good news from the VPC today: the number of gun dealers in the United States since 1994 has gone into freefall–from 245,628 then to 54,902 in 2005.

“The number of gun dealers in America has dropped by 190,726 since 1994 according to a new study released today by the Violence Policy Center. They found that the number of Type 1 FFLs plummeted 78%: from 245,628 in 1994 to 54,902 in 2005.”

According to the anti-gunners, the 1992 VPC publication focused national attention on “abuses by FFL holders” and surmised that the bulk of the FFLs were held by what they termed “illegitimate” kitchen-table dealers who operated out of their homes, garages or offices. They go on to claim, without any evidence, that an unknown percentage of these “kitchen-table” dealers were actively involved in criminal gun trafficking.

The new VPC study claims that as the result of policy recommendations contained in the first study: “today only five states have more gun dealers than gas stations.”

The chart in the study claims that those five states are Alaska, Idaho, Montana, Oregon, and Wyoming. Why this is significant or relevant, I don’t know.

Truth is, there are a lot of reasons why the number of gun dealers has been declining, some of which have to do with new trends in retailing. Since the 1992 study was issued, large sporting goods chain stores have been building box stores all over the country and some chains have been buying up other chains. Faced with competing against the big guys, more and more small retailers have been closing their doors.

Meanwhile, the number of gas stations has also been declining for reasons that have to do with aftermarket automobile service and changes from gas stations to neighborhood delicatessens.

Crime Down
GunGuys.com may think this is good news, but why is not clear. For reasons that sociologists and criminologists believe have little to do with gun laws, violent crime has also been in a freefall. At the same time, while there may be fewer Type 1 FFLs in America, the number of guns being sold and in private possession has been increasing.

If the VPC focus on the number of federally licensed gun dealers ever had any relevance, it would seem to be somewhere out in left field today.

While the Brady Act which first required a waiting period for a background check for prospective handgun buyers only went into affect in 1994, the transition to the National Instant Check System (NICS) for all firearms purchases didn’t replace the waiting period until Nov. 30, 1998. From that date through Dec. 31, 2004, the FBI reports that a total of 53,107,772 background checks have been conducted through NICS. Of these, 26,993,482 were processed by the federal NICS Section and 26,114,290 were processed by the NICS Point-of-Contact (POC) states.

(The FBI also reports that from Nov. 30, 1998, to Dec. 31, 2004, the NICS Section has denied a total of 406,728 firearm transfers and witnessed a steady decrease in the national denial rate. The NICS denial rate [based on NICS Section statistics only] decreased from 1.43% reported in 2002 to 1.36% in 2004.)

Roughly 8.5 million transactions have cleared through the NICS system every year for the last five years, with about half going though the FBI’s federal NICS center and the other half going though the POC states. No matter how many FFLs are issued, the figures on new and used firearm sales have been pretty constant.

VPC Wish List
But ignoring that fact, the VPC report concludes with a series of seven recommendations for policy actions:

  1. All federally licensed firearms dealers should be required to operate from a storefront business, not a residence. Licenses should be limited to businesses devoted primarily to the sale of firearms. Gun shops should be conspicuously identified to the public as such. This will reduce the number of dealers ATF must monitor.

  2. ATF should have the authority to suspend a dealer’s license or assess civil penalties—in addition to revocation authority—when a dealer violates the law.

  3. ATF’s ability to inspect a licensee’s premises to ensure compliance with recordkeeping and other requirements should be expanded from once a year to at least four times per year.

  4. The “loophole” which allows dealers to divert firearms from their business inventory to their “personal collections” and then sell those guns without performing the Brady background check should be eliminated.

  5. Dealers should be required to safely and securely store their inventories of firearms.

  6. Local law enforcement agencies and regulators should closely monitor dealers in their areas to ensure that they are in compliance with all applicable local laws including business licensing, zoning, and any pertinent local firearm restrictions such as bans on “assault weapons” and “armor-piercing” ammunition.

  7. Congress should rescind the provision included in ATF’s fiscal year 2005 and 2006 spending authorizations prohibiting the agency from denying licenses to persons who do not meet the “engaged in the business” test for business activity.

Stay tuned.

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