July 14, 2023 – 19 Democratic members of the US House recently proposed a bill that would prohibit the making of short-term, Buy Now, Pay Later (“BNPL”) loans for the purchase of semiautomatic “assault weapons.”

The bill, H.R. 9686, also known as the Assault Weapon Financing Accountability Act (the “Act”), was introduced by Connecticut Representative John Larson and co-sponsored by 18 other Democrats. According to the Act, a BNPL loan is a loan made primarily for personal, family, or household purposes and payable in four or fewer installments (not including a down payment). Violators would be subject to a $100,000 penalty.

Several major financial services companies, including Affirm, Klarna Bank, Afterpay, PayPal, and Zip Co, already prohibit BNPL loans to finance the purchase of firearms and/or ammunition. Co-sponsors of the Act maintain that “[they] are concerned that the ease with which buyers can acquire guns through BNPL will result in more guns and increased gun violence in our nation’s communities. As the online gun market continues to grow exponentially, public safety clearly demands that we conduct robust oversight of Credova Financial, LLC’s Buy Now, Pay Later services.” Last year, lawmakers, including Larson, sent a letter to Credova with questions concerning its financing and marketing of online firearm purchases.

According to proponents of the Act, “[b]anning use of instant financing like BNPL options for assault weapons and the ghost gun kits is a step toward reducing the instant accessibility of these weapons and preventing the tragedies of gun violence before they occur.” Of course, this statement completely mischaracterizes the procedure required to purchase a firearm from a licensed dealer, whether or not the purchase is financed. Larson stated that BNPL loans for weapons drew heightened scrutiny after the Uvalde, Texas, school shooter was found to have purchased a rifle manufactured by Daniel Defense, which offers financing plans through Credova. However, Daniel Defense has explicitly stated that it did not finance the shooter’s purchase of firearms.

Renzulli Law Firm, LLP will continue to monitor new and developing firearms legislation and regulation around the country.  If you have any questions concerning firearms related legislation or regulations, please contact John F. Renzulli or Christopher Renzulli.