Louisiana Makes It Illegal To Use Cash For Secondhand Sales | Hacker News Reader

Louisiana Makes It Illegal To Use Cash For Secondhand Sales

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29 pointsnextparadigms43 comments

Several comments here have mentioned that this applies to pawn shops. It does not. The bill explicitly exempts them from the cash requirement. It's a little hard to notice, because it basically says something like "the provisions of section X do not apply to dealers operating under Y". Y is an existing section of Louisiana law that covers pawn shops, and X is the section of the new law that imposes the cash restriction.

This bill, like many, is written as a list of edits to apply to the existing law. If you don't read the existing law, you can get a very misleading idea of what the bill does. For example, there's one place where the existing law has a list of 4 categories of exceptions to the reporting requirements. The new bill modifies one of them, and adds a fifth. The other 3 are unchanged, and so are not mentioned at all in the bill, and remain in effect. Someone who doesn't read the original law might get the impression that there are only 3 exceptions in the list of exceptions (although the fact that they are numbered 1 and 5 hopefully would tip most people off...)

This is pretty clearly targeted at meth heads, auto thief rings, and the mob (there's a mob in LA?). It basically says if you're running any kind of scrap metal yard, auto yard or dealer, pawn shop, or similar business where you buy high value items from anybody who walks in off the street, stop giving people cash so we can track them down.

The law's so poorly written and overbroad (i.e. the definition of "junk" is "junk"; a single garage sale would seem to subject you to liability) that, even if it's legal for a state to ban the use of cash (almost certainly not), this thing will get thrown out anyway.

I don't know if the issue is as prolific in LA as it is here in Florida, but we're experiencing a huge number of thefts of air-conditioning "cores". The thief hits a sub-division that is largely vacant, pops the top off the A/C system, cuts the tubing and removes the largely-copper condenser coil. The thief then sells a truck load of these cores to a scrapyard for around $100 each. The owner of the unit is faced with a couple thousand dollars in repair bills. Thieves in this area have honed their core-lifting skills on unoccupied residential areas, and have moved on to hitting commercial properties late at night when no one is around to hear them. There were 7 homes hit in our neighborhood in the last 3 months, and at least one commercial business that made the papers because of the exorbitant cost of replacement ($15k).

There's a lot of pressure growing to enact policies that make it harder to traffic in the stolen materials, as well as providing a means to track down the sellers. This smells like the same thing.

I'm sure FL experienced this as well, but for the past few years, as foreclosures have left whole neighborhoods vacant in parts of CA, NV and AZ, people have been coming through and just ripping copper piping straight out of the walls. Thousands of dollars in damage for a couple dollars worth of scrap metal.

And I was kidding about the meth head thing. Last time I was up in Portland, they were doing a bunch of work on the railroad. Some guys had ripped out all the ties along a half mile stretch of the line. Again.

Trying to police the source of the cash is smart. It's just probably not going to fly with this law.

http://legallad.quickanddirtytips.com/legal-tender.aspx I found this to be an interesting read. Particularly " In fact, as we discussed in our earlier episodes, courts in a number of states have dismissed challenges to various no-cash policies."

If there isn't already solid legal protection from states passing laws like this, then we ought to consider a constitutional amendment.

The law applies to 'second-hand dealers', and it's not clear whether this term is defined. Does it only apply to professional second-hand dealers, or to anybody selling anything?

I would hope that it applies to everyone or the law would be miss a portion of the illegal activity they are attempting to capture. Criminals will probably still operate in cash and those that are law-abiding now have to go through the hassle of documentation.

So, the criminal is going to be caught because they documented their illegal activities?

I think this is a case of a law that catches only the innocent.

Well, if it prevents thieves from selling their stolen goods to legitimate dealers and forces them to go to specialist "fences", then the law could certainly help achieve its objective of making life more difficult for thieves.

The question is whether the law does too much to hassle the innocent to make it worthwhile.

Recording cash transactions seems like maybe not too much. Making them impossible/illegal certainly seems to be too much.

It's defined in §1861(A)(1) as "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."

The law seems targeted at pawn shops and the like, but is broadly worded enough to apply to some random person buying stuff off of Craigslist.

In the Spring and Autumn, many sports nuts go through a flurry of second-hand sales and purchases. I’m selling a couple of pairs of mountain bike tires right at this moment, so if I were in LA, I would break the law if I accepted cash for a $25 pair of tires.

Nice!

It's defined in section 1861:

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, 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.

So (and my eyes glazed over that huge list of objects) the threshold is "more than once a month"? That sounds... far too broad.

This law will only result in lost tax revenue as dealers keep cash transactions off of the books. Checks are worthless and there are no free electronic transfers in the States like in the EU.

Punishing the innocent by offloading law enforcement duties is not a good way to run a society, it just erodes respect for the law.

Legal tender is a form of payment, defined by law, which must be accepted by creditors as payment for debts.

That seems at odds with a law preventing the use of legal tender for certain transactions.

Most sales don't involve debt, though. The law couldn't prevent you from using cash to pay off a loan you took out for the item, but it can prevent you from directly paying cash for the item (I think).

That is correct. This is why merchants can refuse your business if you want to pay for something expensive with pennies.

I think that might be off a bit. Merchants are allowed to refuse any coinage in excess of something ($20?).

Coins and paper money have different rules in general.

Merchants can refuse your business for any reason they want....

Not if you're in a protected class, like being black.

Seriously? Do you have a reference for this? I don't mean to doubt you, I just would not have guessed this to be legitimate.

They cannot refuse you for BEING black, but they can refuse you for any other reason that isn't "protected".

No, it's a more fundamental issue: merchants are free to simply refuse your business. And if you're about to pay in pennies, they'll probably refuse your business.

I doubt that's true if you're in a protected class, as defined by the appropriate laws.

Wrong. In the United States, firms cannot refuse to deal with you because of your race, gender, age, national origin, etc., but they can refuse your business for any other reason, whether you're in a protected class or not.

In other words, no, our constitution does not require us to accommodate an old black woman from Jamaica who wants to purchase a Cadillac with her hoard of five million pennies.

I'm sure there's law around this, but I can imagine a secondhand seller giving a short-term (e.g. 5 seconds) loan to a buyer and then the buyer paying off the debt in cash. :-)

A debt is any financial obligation. Any partially executed contract (you receive a good you agreed to pay for), creates a financial obligation, and hence a debt.

So, article I should make the law invalid.

You are incorrect.

A debt is a future payment. If there is no future payment, there is no debt. A hot dog stand can refuse cash for instance, with no issue.

That's because the hot dog stand can refuse business to anyone....

A fixed and certain obligation to pay money or some other valuable thing or things, either in the present or in the future.

http://legal-dictionary.thefreedictionary.com/_/dict.aspx?wo...

You're mincing words and still getting the definition of legal tender wrong. Currently purchased goods and services aren't the same thing as debts.

You need a subsection of a the correct law to get the pertinent definition. Here is a cite from the Treasury Department of the United states Explaining the pertinent section of law:

From http://www.treasury.gov/resource-center/faqs/Currency/Pages/...

Legal Tender Status

I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal? The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

Could you then work around this law by issuing a note of credit to the customer, and then taking their cash to pay off the note?

I think you could, but I think there would be some risk involved. The customer would rightfully own the item before you received payment, and if he walked off with it without paying he would not be stealing, but rather defaulting on a debt. To collect, you would then be subject to all of the relevant laws surrounding debt collection etc. rather than having a simple stolen property claim.

Eugene Volokh wrote about this law yesterday. He addresses whether this law is inconsistent with "legal tender", and notes that a recent district court decision ruled that a very similar law was upheld and ruled not to be.

http://volokh.com/2011/10/19/louisiana-bans-secondhand-deale...

United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues. Foreign gold or silver coins are not legal tender for debts. —31 U.S.C. § 5103

It seems unlikely that a prohibition on the use of cash in any transduction is likely to survive judicial examination.

In my reading of this, it's for dealers only - pawnshops and such... in which case it wouldn't really prevent the thing it's attempting to prevent.

"more frequently than once per month from any other person, ... shall be deemed as being engaged in the business of a secondhand dealer."

So more than one Ebay a month and you are a dealer.

What about garage sales?

There is a list in the law of things it does not apply to. One of them is "Private residential sales commonly known as 'garage sales' or 'yard sales' as long as such sales take place at a residential address".

Sounds like they're clamping down on auto theft -> scrap metal rings.

Simply trade the goods for a debt obligation due immediately.

This isn't to catch b&e artists it's to catch people not paying taxes.

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