NFA Transfers

I mentioned yesterday that NFA transfer requests are up significantly this year (and have been increasing steadily back to 2005. This has led to increased wait times because it has happened in conjunction with a hiring freeze and a couple retirements at ATF. They have 7 examiners now to deal with all the paperwork. It’s also worth realizing that the tax payments go into the feds’ general fund, and that money isn’t made available to ATF to hire more examiners. Not that I mean to stick up for them, but we have to understand how the situation works before we can try to fix it.

The other major change that was discussed at the NFATCA meeting this past weekend was the removal of the chief law enforcement officer (CLEO) signature on transfers. For those of you who may not be familiar with the process, right now you have to inform your local chief cop when submitting an NFA transfer, and they sign the ATF form acknowledging this. Well, lots of them have decided to simply refuse to sign the forms in order to prevent their subjects constituents from being able to buy neat toys.

This action, of course, was not without unintended consequences. Some savvy folks noticed that legally, a machine gun or other NFA item could be purchased by a corporation or living trust, and the law did not require CLEO sign-off for transfers to those types of legal entities (and since corporations and trusts are not people, those transfers also did not require photo, fingerprints, or background checks). Today, there is a booming business in NFA transfers to trusts. In addition to bypassing much of the hassle of the transfer process, a trust is originally intended to facilitate inheritance, and allows one’s inheritors to be written right into the trust and take possession of a gun upon the buyer’s death without any additional paperwork (assuming the trust is written correctly).

Something that simplifies the process this much is not what a government agency wants to see happen, of course. They want to see trust ownership of NFA items eliminated, I’m sure, but can’t just change the law unilaterally (though if push came to shove I’m sure they could find a way). But there have been a couple cases of convicted felons legally getting possession of NFA goodies by registering guns to trusts.

The solution that was proposed was to make individual transfers more attractive than trusts by removing the CLEO signoff requirement from all transfers. This would eliminate one of the big hurdles people face in anti-gun areas. The CLEO signature was never intended to give cops power to refuse transfers unilaterally, but that is what it became. So ATF has rewritten the rules to remove it, and that new set of regulations is at OMB (Office of Management and Budget) right now to be reviewed and published, at which time it will take effect. Of course, OMB is another bureaucratic goliath , so it will likely take most of a year before this becomes active law. But it’s coming, and very unlikely to be stopped now.

It should be noted that at the same time, ATF is also putting in motion plans to start running background checks on trustees and corporate officers listed on trust and corporation transfers. This will undoubtedly increase the wait time for those applications. But the CLEO removal will definitely help continue the expansion of NFA ownership.