The problem with this is pretty obvious. When some scumbag like a pimp or similar without a conviction goes for a permit, you end up in a situation where the police are enabling certain types of undesirable behavior.
IMO, discretion for this sort of thing should be with a judge, not a cop.
How are they enabling undesirable behavior? Wouldn't the behavior occur anyways? Most people would be stupid to create a paper trail for themselves if they plan to use a weapon in a crime. Hence the reason close to 50% of guns recovered from a crime were stolen.
How would a judge or a cop have any impact on a situation without a conviction? They wouldn't know any better without additional data.
IMO, discretion for this sort of thing should be with a judge, not a cop.