When federal regulators revoke a gun dealer's license or reject their license renewal, the dealer today can move the store's firearm inventory into their personal collection and then sell it off privately — a workaround known as the 'fire sale loophole.' This bill would make that illegal. Former dealers would be barred from transferring business-inventory guns into their personal collection or to employees, and from selling them to anyone other than another licensed dealer or law enforcement. Violations would carry up to 1 year in prison, or up to 5 years if willful. The aim is to stop losing-license dealers from quietly offloading thousands of firearms outside the background-check system.
Congressional Summary
Fire Sale Loophole Closing Act of 2025This bill establishes restrictions on the transfer of business inventory firearms by a federally licensed dealer, importer, or manufacturer of firearms (i.e., a federal firearms licensee, or FFL) whose license is revoked or denied. The term business inventory firearm means a firearm that is required to be recorded in the acquisition and disposition logs of a firearms business.Among the restrictions, the bill generally prohibits the transfer of a business inventory firearm by an FFL to their personal collection or employee after they receive written notice revoking or denying their license or by a former FFL to any non-FFL on or after the date their license is revoked. The bill also prohibits the transfer of a former business inventory firearm from a personal collection within one year of the date the firearm was transferred to the personal collection.An individual who violates the restrictions is subject to criminal penalties—a fine, prison term of up to one year (or five years if the violation was willful), or both.Finally, the bill requires the written notice revoking or denying a license to include the federal statutes and regulations that prohibit a non-FFL from engaging in the business of dealing in firearms, as well as the restrictions on transferring business inventory firearms by an FFL or former FFL whose license is revoked or denied.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-06-27
- Date Added
- 2026-04-22
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