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SUMMARY: As written, the SAFER Banking Act of 2023 does not sufficiently protect the gun industry or the right to keep and bear arms. Instead, it makes a presently illegal substance legal to bank while allowing banks and regulators wide authority to de-bank the constitutionally-protected right to keep and bear arms. Some flaws in the proposed statutory language could negatively impact half of the gun stores in the United States!

Sec. 10(b)(1) only restricts the actions of rogue federal bureaucrats while doing nothing to address the actions of anti-gun banks and other financial institutions who owe their continued existence to taxpayer bailouts and other government assistance. These woke institutions have no right to discriminate against the constitutionally protected rights of the American people or the commercial services they provide which enables this constitutionally protected activity.

Sec. 10(b)(2)(A)(i)(I) fails to provide a statutory definition of “unsafe or unsound practice in conducting business” which guarantees protections for the firearm industry. While existing case law provides a reasonable interpretation of such language, it’s far from settled Supreme Court precedent. Gun Owners know full well how statutory language can be redefined and weaponized with a simple rule change and agency definition. A rogue bureaucrat might wrongly blame the firearm industry for categorically engaging in “unsafe” business practices by blaming corporations for the acts of criminals. A rogue regulator might go so far as to suggest that a federally licensed firearm dealer (FFL) has “unsound practice in conducting business” if ATF has found one or two violations during a routine inspection or conducted a Warning Conference.

Sec. 10(b)(2)(A)(i)(II) encourages bureaucrats to instruct financial institutions to de-bank “institution-affiliated part[ies]” such as members of the firearm industry if they suspect that a law or even “informal guidance” from an agency has been violated. Elsewhere in federal law, statutes specify that similar language applies only to laws or guidance issued by a Federal banking agency but such a clarification can be found nowhere in the SAFER Banking Act’s bill text.

Without clarification, this statute could be interpreted in the light of federal firearms law and “informal guidance,” which makes mundane and simple mistakes such as misspelling an abbreviation on a form into federal crimes for which a gun store could now be penalized. Good-faith, clerical, and ultimately harmless errors in FFL recordkeeping are a statistical inevitability.  For example, ATF’s published data concerning its compliance inspections in 2020 reflects that it conducted 5,823 and found and reported errors in 43.7% of those inspections.[i] ATF’s compliance inspections for 2022 increased over 2020 by 1,156 inspections to 6,979 inspections, and ATF’s data reflects that it found and reported errors in 45.5% of the inspected FFLs.[ii] In summary, a failure to clarify whether this section applies only to banking regulations could result in nearly half of all gun stores losing access to financial services!

Further, ATF routinely issues contradictory guidance letters to the firearm industry, refuses to publish the guidance publicly, and has even reversed such guidance in a way that had criminalized millions of customers and shut down entire companies. Persecuted members of the firearm industry will not only have to contend with rogue ATF regulators in court, but also be cut off from essential financial services because of such “informal guidance.”

Sec. 10(b)(2)(A)(ii) reveals that the criteria contained in SAFER Banking describing when a bureaucrat may recommend de-banking a disfavored depository institution, such as a member of the firearm industry, is not exhaustive. Surely creative anti-gun bureaucrats will abuse such a loophole to attack our industry.

Sec. 10(b)(2)(B) imposes strict liability on the firearm industry regardless of whether the business had knowledge they were dealing with “a threat to national security,” someone involved in “other illicit financing,” or is “engaged in… any other criminal activity.” For example, criminals routinely lie to gun stores and straw purchase firearms in violation of federal law. And during Operation Fast and Furious the federal government allowed a “transnational criminal organization, drug trafficking organization, or money laundering organization”—namely agents of Mexican cartels—to purchase firearms at gun stores. More recently, the Biden Administration has begun publishing Firearm Compliance Inspections to allow anti-gunners to harass gun stores for making paperwork violations. Gun stores are afforded little protections by this expansive and flawed list of “valid reasons” to deny financial services to the firearm industry written in the false name of “national security.”

Indeed, the Second Amendment is “essential to the security of [our] free state,” but the federal government has been weaponized against gun owners. Agencies responsible for national security now routinely refer to gun owners as “Militia Violent Extremists” or “Domestic Violent Extremists.” It is no stretch of the imagination that bureaucrats might recommend de-banking the entire firearm industry based solely on this abhorrent determination that firearm industry customers “pose a threat to national security.” Recent history suggests this is clearly the Democrats and the anti-gun lobby’s goal, such as when:

  • Members of the House Oversight and Government Reform Committee accused gun manufacturer Daniel Defense of marketing its products to the “white supremacist” movement based solely on a misunderstanding of an ancient pagan tattoo.
  • Manufacturer Palmetto State Armory was accused of marketing its products to the “FBI-identified, far-right, domestic terrorist threat ‘Boogaloo Boys’” based on a floral camo pattern painted onto one of its rifles.
  • Several cities—in coordination with the anti-gun lobby—have sued gun parts manufacturers like Polymer80 and JSD Supply for facilitating gang and gun violence by selling its products despite their compliance with state and federal law.

Sec. 10(f) instructs anti-gun federal bureaucrats to help anti-gun banks adopt rules which the firearm industry ought to abide by in order to gain access to financial services. If Congress chooses to delegate this rulemaking authority to bureaucrats—rather than enacting specific rules for bureaucrats to implement—then the bureaucrats will no doubt write the most anti-gun rules possible.

Article by Ben Sanderson


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