Sometimes referred to as the Brady bill loophole,[9] the Brady law loophole,[10] the gun law loophole,[11] or the private sale loophole,[12][13][14] the term refers to a perceived gap in laws that address what types of sales and transfers of firearms require records and or background checks, such as the Brady Handgun Violence Prevention Act.[15] Private parties are not legally required by federal law to: ask for identification, complete any forms, or keep any sales records, as long as the sale is not made in interstate commerce (across state lines) and does not fall under purview of the National Firearms Act. In addition to federal legislation, firearm laws vary by state.[16]
I am not a lawyer. I do not sell firearms.
The gist I get is that this opens up enough loopholes to permit unlicensed mules/fences on either side of the transaction. Depending on what political leanings and circumstances are in play, this legal framework might actually encourage that behavior.