The State of Louisiana has just passed new legislation BANNING cash transactions for used goods, mandating that any purchase be made via check, electronic transfers, or money order issued to the seller.
The draconian new law also requires all transactions to provide the State documentation of a description of the goods sold, and the client’s personal information including name, address, driver’s license number and the license plate number!
House Bill 195 states, the State of Louisiana has banned the use of cash in all transactions involving second-hand goods. State representative Ricky Hardy, a co-author of the bill, claims that the bill targets criminals who traffic in stolen goods. According to Hardy, “It’s a mechanism to be used so the police department has something to go on and have a lead.” The bill prohibits cash transactions by “second-hand dealers,” defined to include garage sales, flea markets, re-sellers of specialty items, and even non-profit re-sellers like Goodwill. Curiously, it specifically exempts pawnbrokers from the ban. But of course, pawn shops – and not rented stalls at local church flea markets – are notorious as places that criminals frequent to convert stolen goods into quick cash. So what gives? Are the authors of the bill and those who voted for it ignoramuses – or are they deliberately obscuring the real purpose of the bill? The answer is clear once we examine the other provisions of the bill. The bill goes far beyond banning cash transactions.
Every person in this state engaged in the business of buying, selling, trading in, or otherwise acquiring or disposing of junk or used or secondhand property, including but not limited to jewelry, silverware, diamonds, precious metals, ferrous materials, catalytic converters, auto hulks, copper, copper wire, copper alloy, bronze, zinc, aluminum other than in the form of cans, stainless steel, nickel alloys, or brass, whether in the form of bars, cable, ingots, rods, tubing, wire, wire scraps, 10 clamps or connectors, railroad track materials, water utility materials, furniture, pictures, objects of art, clothing, mechanic’s tools, carpenter’s tools, automobile hubcaps, automotive batteries, automotive sound equipment such as radios, CB radios, stereos, speakers, cassettes, compact disc players, and similar automotive audio supplies, used building components, and items defined as cemetery artifacts is a secondhand dealer.
Anyone, other than a nonprofit entity, who buys, sells, trades in, or otherwise acquires or disposes of junk or used or secondhand property more frequently than once per month from any other person, other than a nonprofit entity, shall be deemed as being engaged in the business of a secondhand dealer.
A secondhand dealer shall not enter into any cash transactions in payment for the purchase of junk or used or secondhand property. Payment shall be made in the form of check, electronic transfers, or money order issued to the seller of the junk or used or secondhand property and made payable to the name and address of the seller. All payments made by check, electronic transfers, or money order shall be reported 16 separately in the daily reports required by R.S. 37:1866.
The law goes further to require secondhand dealers to turn over a valuable business asset, namely, their business’ proprietary client information. For every transaction a secondhand dealer must obtain the seller’s personal information such as their name, address, driver’s license number and the license plate number of the vehicle in which the goods were delivered. They must also make a detailed description of the item(s) purchased and submit this with the personal identification information of every transaction to the local policing authorities through electronic daily reports. If a seller cannot or refuses to produce to the secondhand dealer any of the required forms of identification, the secondhand dealer is prohibited from completing the transaction.
This legislation amounts to a public taking of private property without compensation. Regardless of whether or not the transaction information is connected with, or law enforcement is investigating a crime, individuals and businesses are forced to report routine business activity to the police. Can law enforcement not accomplish its goal of identifying potential thieves and locating stolen items in a far less intrusive manner? And of course, there are already laws that prohibit stealing, buying or selling stolen goods, laws that require businesses to account for transactions and laws that penalize individuals and businesses that transact in stolen property. Why does the Louisiana State Legislature need to enact more laws infringing on personal privacy, liberties and freedom?
The standard justification for a law such as this is easy to understand. Second hand stores and pawnbrokers if only because both have long been a source for people in possession of stolen good to fence their ill-gotten wares. However, the law itself actually exempts pawnbrokers from the no-cash part of the law even though it’s fairly clearly that pawn shops are notorious as the destination for stolen goods. If the law was really aimed at preventing stolen goods from being sold in this manner, why ban pawnbrokers? Even if you accepted the justifications on their face, though, his law goes way too far, especially in the banning of cash transactions. The purpose of the bill could be met simply be requiring some form of Identification be taken when a transaction is made, and that records of the same be maintained. Banning the use of legal tender completely is way over the top.
Additionally, while I haven’t researched the issue, I’m not even sure that the state has the authority to say that Federal Reserve Notes, which Congress has made legal tender for all transactions, cannot be used in a transaction. I would think that there’s a case to be made here that Louisiana has violated the Supremacy Clause of the Constitutional by saying that U.S. currency cannot be used for a certain class of transactions. Certainly, if this is allowed to stand, then the effect would be that any state could say that cash cannot be used for any number of transaction in the name of “fighting crime,” “public safety,” or whatever other excuse an inventive legislator can come up with.
It’s easy to understand why Louisiana would want to ban cash transactions. Absent some other form of record keeping, cash brings a kind of anonymity that paying with credit cards, debit cards, or checks cannot offer. If I’ve got a hundred bucks in my wallet, I can spend it anywhere I want without any concern that someone, somewhere is tracking me. You can’t say the same thing with any other form of payment. There’s something to be said for the ability to conduct your business without worrying about whether or not what you buy and where you buy is being monitored, either by a private entity or the government. In Louisiana, though, you can’t do that anymore, at least not if you want to buy used goods.