Guest Commentary from the Aug. 8, 2016, issue of Coin World:
years ago Minnesota passed legislation that could have had devastating
consequences for coin dealers across the country. Despite its name,
the Minnesota Bullion Coin Dealer Law covered all coin dealers and
regulated transactions that occurred entirely outside of Minnesota.
Worse yet, dealers found it impossible to determine which consumers
and transactions were regulated under the law. As a result, dealers
were at risk of violating the law even when they made good-faith
efforts to comply or to avoid doing business in Minnesota.
MBCDL included many other burdensome requirements, some of which were
impossible for most dealers to implement. Failure to comply carried
the risk of fines up to $10,000 per violation — even criminal
penalties. Many dealers simply withdrew from the state. Collectors and
investors suffered from the loss of choice and competition among
dealers, and many consumers found they could no longer do business
with trusted dealers they had known for years.
other states adopted the Minnesota law, our business and hobby would
years and hundreds of hours of work by ICTA led to enactment last May
of legislation that removes or limits some of the most burdensome
requirements of the MBCDL. Since passage of our bill, however, we’ve
seen some misrepresentations and confusion about its effects. I want
to address these questions here.
FALSE: Our bill increased the number of dealers subject to the law.
fact, we significantly reduced the number of regulated dealers by:
the regulated transactions to those that physically occur in the state
or where a consumer uses a Minnesota shipping address.
the annual registration threshold from $5,000 to $25,000.
from the $25,000 threshold all transactions with non-Minnesota consumers.
the coin show exemption.
FALSE: Our bill increased the regulatory burden on dealers.
fact, our bill substantially reduced the regulatory burden by limiting
or eliminating certain requirements of the MBCDL. For example, we
eliminated background check and registration requirements for
employees who deal with customers solely for administrative purposes
and salespeople who deal exclusively with customers outside of
Minnesota. We also eliminated the requirement to routinely file
background checks with the regulator.
FALSE: Our bill expands the list of products covered by the
law, which increases the number of dealers subject to the law.
fact, the Department of Commerce had determined that the MBCDL already
covered these products (i.e., bars, rounds, and ingots, and platinum
products). Specifying these products in our bill was simply a
clarification, not a change in how the law is enforced.
FALSE: Our bill reduces the number of small dealers who qualify
under the coin show exemption.
fact, we expanded the exemption. The MBCDL exempted dealers who
conduct transactions at “occasional” coin shows. No one knew what
“occasional” meant, so many dealers, especially out-of-state dealers,
stopped attending Minnesota shows. At various times regulators said
“occasional” meant two, three, or as many as six shows. Our bill
removed this uncertainty and expanded the exemption by raising the
number of exempted shows to 12 per year and excluding out-of-state
shows from the 12-show count.
bill is not perfect, but it’s a vast improvement over the MBCDL. We’ve
developed a good working relationship with Minnesota regulators, who
now have a better understanding of our business and know that the vast
majority of us are reputable business people. This will benefit
dealers who make good-faith efforts to comply with the Minnesota law.
invested more than $160,000 in passing this legislation. Many dealers
who benefit have not yet contributed to this effort.
urge you to do so now and to become a member of ICTA.
Philip Diehl is vice chairman of the Industry
Council for Tangible Assets. He is a former director of the United
States Mint and chief of staff of the U.S. Treasury.