Weekend Considerations

Jan 29, 2021

The new administration may have quietly fired its significant shot across the bow of the firearms industry. In fact, some leaders are convinced it has.

Yesterday, the Office of the Comptroller of the Currency announced it had “paused” publication of its November 2020 rule designed to ensure large banks provide all customers fair access to their services.

The agency, as you’ll remember, proposed the rule to codify OCC guidance that banks should conduct risk assessments of individual customers, rather than making “broad-based decisions affecting whole categories or classes of customers, when providing access to services, capital and credit.”

That “paused” rule was the one designed to protect “undesirable” companies (think gun companies, gun stores and pawn shops) from wholesale discrimination simply because they were not acceptable businesses.

The reasoning the OCC used for their “pause” was to “allow the next confirmed Comptroller of the Currency to review the final rule and the public comments the OCC received” -all ostensibly part of an “orderly transition.”

The Office of the Comptroller of the Currency, in announcing the “pause” stated that the “long-standing supervisory guidance stating that banks should avoid termination of broad categories of customers without assessing individual customer risk remains in effect.”

It’s probably worth nothing that the same “guidance” was in effect when the Obama Administration initiated “Operation Choke Point” - their financial ploy designed to squeeze “undesirable” companies’ access to banking services.

What does it mean? Here’s a first impression from the National Shooting Sports Foundation’s Senior VP and Counsel Larry Keane: “ “The first salvo in the gun control fight has begun and the Biden Administration has fired the first shot by improperly interfering in the affairs of the OCC which is an independent agency.”

No equivocation there.

Yesterday’s decision prompted North Dakota Senator Kevin Cramer (R) to issue this statement:

“The Fair Access rule was completed with no steps skipped, and all interested parties were allowed to give their input. It is a good and necessary rule, designed to protect legal businesses from facing discrimination by big banks. There’s no reason for today’s action by career officials in the Office of the Comptroller of the Currency other than bending to political pressure from big banks, and stalling or eliminating the rule will not stop the efforts of those of us who support it from continuing these efforts. The Biden Administration should use this opportunity to demonstrate leadership and not just be puppets for the large financial interests who back them.”

Sen. Cramer is a member of the Senate Banking Committee. Like many industry leaders, he’s not pleased. They’re so displeased that a group of nineteen Senators who normally don’t agree on much of anything wrote a letter to President Biden reminding him of his Constitutional duties to “take care that the laws be faithfully executed”.

You can read that letter here.

We’ll keep you posted on this one. But we’re not betting the new administration will quickly change its mind and publish the new rule. Seems the “thin veneer of civility” may be peeling already.

Yesterday’s suggestion for having “Ammo Swap Saturdays” to help shooters find ammo kicked up considerably more conversation than anticipated. My mental block about consistently misspelling Paul Markle’s name notwithstanding, his idea got the attention of a lot of people.

Interestingly, a couple of dealers responded they’d consider hosting “swaps”.

Since we’re to the point where ammo could be sold by reservation only, you wouldn’t think they’d be interested in hosting something like this.

But there’s actually a solid business reasoning behind the “hosting” idea: you are creating reasons for existing and potential customers to visit your store. And it helps customers.

Response yesterday indicates the gazillion or so new gun owners didn’t all buy new guns.

Some apparently bought used guns. A few of them in calibers they didn’t realize had the ability to shoot more than one caliber.

One “new” used gun owner, for example, was delighted to learn that his “like new” .357 magnum could also fire .38 Special ammo. “I got three boxes of .38 Special in the deal,” he told me, “I thought I might be able to swap that to get some .357 Magnum.”

One of our readers cautioned me about running afoul of the feds with the idea.

“I’m all for going to our gun shops and ranges to connect with friends and have an ‘ammo swap’,” he wrote, “we might have to do it covertly lest the Feds drop in on that range or gun shop and demand to collect taxes on that exchange.”

That got me wondering. Might swapping ammo with another private citizen be a problem?

There doesn’t appear to be an excise tax issue if you’re exchanging ammunition between private individuals. The excise tax on the retail sale of ammunition was already paid (unless you’re talking some really vintage stuff).

And according to Scott Estill, a former senior IRS trial attorney, “casual exchange between non-commercial parties (important point) for similar goods/services is usually not taxable.”

The key in this idea is that you’re both non-business parties and the values are nearly identical.

But…before you swap ammo with anyone, you should be aware that the regulations concerning the sale, transfer or possession of a firearm apply to ammo, too.

If you trade ammo with someone who is under indictment for a crime punishable by more than one year in prison or convicted of a felony, is a fugitive from justice, an unlawful user of a controlled substance, addicted to a controlled substance, has been adjudicated as a mental defective or committed to a mental institution, is an illegal alien, has been dishonorably discharged from the military, renounced their citizenship or is subject of a domestic violence restraining order, you’re setting yourself up for a potential federal charge.

So… “swaps” should only be conducted between club members or friends.

And it’s improper to wind up January without addressing one other ammunition-related item.

I’ve gotten several emails of late from blackpowder shooters wanting Blackhorn powder. They’ve all asked if there was anything we could do to help them source some.

Since I’m neither a serious muzzleloader or reloader (obviously- I misspelled Blackhorn, too), I reached out to Aaron Oleger, Vice President of Sales and Marketing for Hodgdon Powder.

Hodgdon owns the Blackhorn brand.

The news, unfortunately, isn’t encouraging.

“2020 was an interesting year,” he told me, “and 2021 doesn’t look much different. Last January/February our sales were really nothing out of the ordinary. In March, everything took off. Demand hasn’t slacked, and we don’t see it dropping -at least through the end of this year.”

The demand is so high, he says, that while they’re certainly not stopping product research and development, they’re not introducing any new product this year.

“We’re coming to work early and staying late,” he says, “making all the powder we can make.”

All, he explained, meant “total capacities” for muzzleloader powder and pellets made in their Kansas facility.

Not good news if you’re looking for powder, or are shocked to see prices for eight-pound containers of powder (including Blackhorn) going for four-to-five times their retail price on some internet sales sites.

But it’s where we are today. Supplies are short across the board. Raw goods, however, are still available. If they dried up, that would be a serious problem.

If you’re an entrepreneur, you’re probably considering the idea of opening your own ammunition business.

With demand so high, you’d have all the customers you could possibly want, right?


The demand’s there, but Oelger explained it wasn’t a good idea to try and get into the ammunition business today.

“We have people contact us nearly every day to tell us they want to get into the OEM ammunition business. They want to open an account and place orders,” he explained, “we’re not taking that business. We have long-term customers who need all the product we can make. There’s just no product available for new customers.”

The fact there is no short-term solution to ammo shortages, and that just might turn into a long term challenge makes Paul Markle’s Ammo Swap Saturdays idea even more appealing.

It also opens us up to your good idea, too. We’d love to hear them -and share them with readers.

After all, none of us is as smart as all of us.

We’ll keep you posted.

—Jim Shepherd