New Jersey

What New Jersey's New Rules for Gun Makers and Sellers Means

An order signed by Gov. Murphy requires any firearms companies doing business with the state to police themselves against straw purchasers and other safety concerns related to gun sales

New Jersey, a state already armed with some of the strictest gun control laws in the country, got even tougher on the firearms industry Tuesday with a new order by Gov. Phil Murphy.

An executive order signed by Murphy also vowed to investigate financial institutions that work for New Jersey to ensure those banks and companies are striving to keep firearms out of the hands of criminals.

The battle over gun ownership and the right of citizens to bear arms, as protected by the Constitution's Second Amendment, has been long and complicated.

Here is what New Jersey taxpayers as well as citizens in surrounding states can expect from the order Murphy signed.

Gun Dealers, Manufacturers Need to Prevent Straw Purchases If They Want to Contract with New Jersey

The sale of firearms to people who then give or sell those guns to bad-minded individuals looking to commit crimes or are not allowed to own guns, also known as straw-purchasing, is one of the most dangerous side effects of the lax gun laws.

New Jersey Governor Phil Murphy signed into law earlier this year a measure making smart guns – which are designed to only be fired by its owner – available in the state, reversing a previous state law stopping them from hitting the market. But some say it’s a product they don’t trust. NBC10 Investigative reporter Mitch Blacher explains.

New Jersey wants firearms companies to implement measures that would prevent straw purchases.

"New Jersey gun dealers overwhelmingly are playing by the rules, but 80 percent of crime guns come from out-of-state. The goal here is to ensure we are not engaging with bad actors and to ask businesses dealing with the state to help ensure minimum standards to reduce the flow of illegal guns to New Jersey," said Bill Castner, Murphy's senior advisor for gun safety.

Why Should Dealers and Manufacturers Care?

Gun sales to individuals in New Jersey is not the pot of gold most dealers and manufacturers care most about — it's the state police and other law enforcement agencies where big money is.

Some $70 million in firearms and ammunition sales occurs annually by state agencies and local police departments, according to Murphy's office.

By putting the onus on the firearms industry, Murphy's administration hopes to wield power that isn't limited to the state's borders, which are porous to people like the straw purchasers mentioned above who go to other states where gun sales are much more lax.

New Jersey will now, broadly-speaking, require manufacturers and dealers doing business with the state to "adopt policies to prevent, detect, and screen for the transfer of firearms to straw purchasers or firearm traffickers; to prevent sales to prohibited individuals; to protect against the theft of firearms and ammunition; to train vendor employees and have reasonable employment policies designed to ensure maximum compliance with the law; to assist law enforcement in the investigation and prevention of criminal access to guns; and to promote public safety."

How (and Why) Are Financial Institutions Like Banks Included in a Gun Control Measure?

Those who control cash flow to businesses like gun makers and gun dealers, i.e. banks, can have a strong influence over who businesses — and entire sectors of the economy — operate.

New Jersey is essentially going to the root of the entire firearms economy by investigating how financial institutions that the state works with oversee its investments in and lending to gun companies.

Murphy's order requires the state treasurer to request within 30 days all financial institutions working with the state Treasury Department "to disclose whether such institutions have adopted any code of conduct or principles related to gun safety or responsible sales of firearms."

New Jersey's bureaucratic lending and borrowing is big business for banks, much like law enforcement is big business for gun dealers. New Jersey pays as much as $1 billion a year in fees to financial institutions, according to the New York Times.

"We need to step up to the plate and do more to protect our communities at all costs by using the power of our purse strings to set an example for others,” state Treasurer Elizabeth Maher Muoio said. "The executive order being signed today will ensure that taxpayer dollars are being used wisely to procure goods and services from companies that act responsibly when it comes to firearms and ammunition and to create an opportunity for local and county governments who want to follow our lead."

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