August 4, 2020
More than two years ago the NPA’s Government Relations Committee heard members’ concerns of receiving trace requests on firearms that were pawned by or purchased from their consumer customers. Previously, the BATFE trace requests to FFLs were only on firearms purchased from distributors or manufacturers.
We heard you and shared your concerns. The GRC asked questions of many of you and determined that all pawnbrokers who received these traces were electronically reporting transactions to LeadsOnline (either pursuant to local ordinance, statute, or voluntarily). During a 2018 state pawn association meeting the BATFE agents present confirmed they were receiving this information from Leads. Our research found mention of a contract that BATFE let to LeadsOnline in 2018, around the time these new traces started.
To determine the nature of this relationship, the NPA Board of Directors authorized the GRC to file a Freedom of Information Act (FOIA) request with the BATFE on June 18, 2018. Receiving no response, NPA sent follow-up letters on October 22, 2018 and January 14, 2019, which were also ignored. The NPA then engaged a well-known Washington, DC law firm who issued another request to the BATFE on our behalf in December 2019. Finally, in June of this year we received some of the documents requested.
We now have some answers to questions pawnbrokers have asked since 2018:
- The BATFE contract with Leads was awarded in February 2018 for one year with two additional one-year extensions that run until February 2021.
- BATFE appoints Leads as their “agent” for receipt of GLBA-protected information from “financial institutions.”
- Neither the BATFE nor Leads is supposed to inform the “reporting business” (you) of their relationship or involvement per their own agreement.
Process for initiating traces:
- BATFE submits to Leads the firearm information,
- Leads compares it to ‘their’ pawn records,
- Leads returns results to BATFE in 72 hours,
- Leads is supposed to make “reasonable efforts” to filter out from any matches the data not related to a firearm,
- Leads sends trace results to BATFE in spreadsheet format with firearm data, pawnbroker’s name and address and date pawned,
- BATFE can search Leads’ records system, including firearms and other secondhand items that have a nexus to their investigation,
- Non-public personally identifiable information is to be limited to individuals pawning or selling property and not to include firearms purchasers, and
- Leads is supposed to destroy trace data within 24 hours of providing it to BATFE.
We wanted to make you aware of the information we found in the documents BATFE produced in response to the NPA’s request. As to why it took two years and hiring a DC law firm to get it is a mystery to us.
The GRC sees this contractual arrangement as another reason for NPA’s longstanding opposition to electronic reporting of any information other than describing the property pawned or purchased. No information about the individual customer should be reported to Leads – but many local ordinances require it.
Please feel free to send any questions or comments to us at the email address
Members should consult their own lawyers for legal advice.