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Should stores selling vintage furniture, secondhand books, or old records be regulated as “pawn shops” by the District? This is just one question being explored after several small businesses complained of a crackdown based on a 1904 law requiring stores that sell used goods to carry a pawn shop license. Join Kojo to find out what’s going on.
- Robert Clayton attorney, Themis PLLC
- Eric Rogers Acting Business Licensing Administrator, Department of Consumer and Regulatory Affairs, Government of the District of Columbia
- Jim Graham Member, D.C. Council (D-Ward 1); Chairman, Committee on Human Services
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington, welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. Later in the broadcast, the life and legacy of the legendary Doc Watson, guitarist extraordinaire, but, first, maybe you saw the recent blog postings with titles like "Does the District hate small business?"
MR. KOJO NNAMDIOr maybe a friend urged you to sign a petition saying used books and record shops are important and colorful parts of the community fabric of Adams Morgan and U Street and that government over-regulating them could cause the death of D.C.'s mom-and-pop shops. Some of the District's quirkier shops, places with names like Miss Pixies, Meeps, Idle Time Books and GoodWood, have been stressed out lately. Why? Well, recently, government officials began visiting the stores, asking to see their business licenses.
MR. KOJO NNAMDIAnd, to their surprise, virtually all the stores had the wrong type of business license. We thought we'd ask: Is it possible to solve this problem in a way that will benefit all? Here to help us answer that question is Eric Rogers. He is the acting business licensing administrator at D.C.'s Department of Consumer and Regulatory Affairs. Eric Rogers, thank you for joining us.
MR. ERIC ROGERSThank you for having me.
NNAMDIAlso with us in studio is Robert Clayton. He is an attorney representing Crooked Beat Records, one of the stores notified that it needed a secondhand business license. He also met with a number of storeowners and volunteered to represent their shared interests. Robert Clayton, thank you for joining us.
MR. ROBERT CLAYTONThank you.
NNAMDIIt's a conversation you can join by calling 800-433-8850. 800-433-8850, have you applied for a business license recently? How hard or how easy was the process? You can also go to our website, kojoshow.org, send email to firstname.lastname@example.org, or send us a tweet, @kojoshow. Eric Rogers, the businesses DCRA visited are not new to the District. In fact, some date back to the 1980s.
NNAMDIBut this is the first time, they say, that the city has ever asked them about the type of business license that they have. There certainly was a time when the District seemed to be known for lax enforcement of certain regulations. What's changed?
ROGERSNothing has really changed, Kojo. The department, DCRA, we always conduct compliance checks -- this is what we call them -- where we go into businesses and make sure that they have the appropriate licenses and the like. So it's an ongoing process. It's part of our core mission and function at DCRA. It -- unfortunately, it was just this -- their time for these types of compliance checks. So -- but it's -- nothing is really...
NNAMDIWell, listening to some of them, their time is, what, every 30 years. You're saying that they were doing this -- the DCRA was doing this on a regular basis. If indeed it was, how come these storeowners say it's the first time many of them ever received this kind of visit?
NNAMDII just got the impression that DCRA was under new management and working more assertively, if you will, to enforce its rules.
ROGERSWe're definitely under new management, and we're definitely looking at all businesses across the District of Columbia and whether or not they're compliant with the licensing regulations. In this particular instance, it was the first time for these specific businesses. Now, for secondhand dealers throughout the city 'cause they -- we have over 90 licenses. They have been visited by DCRA and our counterpart MPD in dealing with these compliance issues.
NNAMDIRobert Clayton, can you describe the specific incident that took place in April at Crooked Beat Records? It's my understanding you got a phone call when the compliance officers were on site.
CLAYTONThat's correct. I got a call from my client indicating that he was being investigated at the time by -- it looks like the MPD and also the DCRA. And they specifically informed him that he did not have the correct licenses or that he didn't have any licenses, and they were going to shut him down and, also, that he'd be subject to fines up to $2,000 a day.
NNAMDIHow was the meeting -- shall we call it -- conducted in the view of your client?
CLAYTONWell, he -- his -- it was his impression that he was guilty without being proven so. He was treated as if he was a suspect. He tried to be very calm. He tried to be very cooperative. But he was met with a sort of a good cop-bad cop routine where one cop was -- one investigator, I'll say, was very aggressive and intimidating, whereas the other one was more passive.
NNAMDIEric Rogers, two people go along for each compliance visit, it's my understanding, correct?
ROGERSNo. In this particular instance, since part of the licensure requirements involved MPD and regulated by MPD, the detective in charge of the pawnshop division, which also oversees secondhand dealer license, accompanied one of our investigators.
NNAMDIAt the risk of heading into the weeds of licensing requirements, why does this particular licensing requirement involving a secondhand store require MPD participation?
ROGERSWell, just to give a little bit of history, if you don't mind, so that...
NNAMDIAll right. We're heading into the weeds all right, but go ahead.
ROGERSNo, not the weeds. But just a bit of history so that folks understand where the regulations came from and why the city did what it did. Right now, there are currently about 90 secondhand dealer licenses active in the city. And the law, actually, for secondhand dealer licenses, it's been around since 1902, so it's a very old law. And, under the law, anyone engaged in the selling of used personal property is required to obtain this license.
ROGERSThe license -- the actual secondhand dealer license regulations had been on the books since 1950 -- in the 1950s. And under the regulations, most secondhand dealers have to get a criminal background check. They have to record each purchase and sale, submit daily reports to the Metropolitan Police Department, and keep track of purchased items in their possession for 15 calendar days. Now, the rationale for that is, again, remember...
NNAMDITo avoid having them being reselling items that may have been stolen.
ROGERSExactly. So that's why we have our MPD counterpart accompany us when we do these compliance checks because they have a list of items that are missing or stolen, and they want to ensure that folks who've been burglarized or robbed that their merchandise isn't going to the black market and, hopefully, come back to them. So that's the purpose of the secondhand dealer regulations as written 100 years ago.
NNAMDII guess, Robert Clayton, your client, not necessarily being aware of the specifics of the regulations, didn't quite understand that, and apparently the presence of the police officer was somewhat intimidating to your client.
CLAYTONThat's correct. The presence of the police officer was immediately intimidating, given the fact that he was not -- I mean, he's selling used records. And most of the businesses that were -- if not all the businesses that were raided on this given day were booksellers, used booksellers, vintage clothing sellers and record stores.
CLAYTONNone of those would fall under the category of groups or businesses that we feel would engage in the sale and resale of stolen merchandise. More particularly, we believe that the statute as originally drafted was intended to apply to pawnshops, which has a history of being involved in fencing of stolen goods.
NNAMDIWait till we get the calls from our pawnshop owners here. The number, by the way, is 800-433-8850. 800-433-8850.
CLAYTONAnd if I...
NNAMDIYou can also send us email to email@example.com. Can we go back to basics for a second, Eric Rogers?
NNAMDIAnyone doing business in the city has to have a business license, correct?
ROGERSThat is correct.
NNAMDIIf that business happens to be a business that sells secondhand records, secondhand books, used furniture, used clothing even, another license is required.
ROGERSWell, the basic -- the license that's required would be the secondhand -- currently the secondhand dealer license. That is your business license. We have over 160 categories of licenses in the District of Columbia of which the secondhand dealer license is one. So for the business activity that you're describing, that's the -- currently, that's the license that you would be required to get.
NNAMDIIf you'd like to join the conversation, do you shop in secondhand or vintage stores? You can just call to tell us which ones are your favorites and why, 800-433-8850. We're talking with Eric Rogers. He's the acting business licensing administrator at D.C.'s Department of Consumer and Regulatory Affairs.
NNAMDIAlso with us in studio is Robert Clayton. He's an attorney representing Crooked Beat Records, which is one of the stores that was notified that it needed a secondhand business license. Robert Clayton has also met with a number of storeowners. He's volunteering to represent their shared interests.
ROGERSAnd, Kojo, if I might...
NNAMDIPlease go ahead.
ROGERSIf I could kind of clarify things with pawnshops...
NNAMDIYes, please do.
ROGERS...and secondhand dealers 'cause there is a lot of confusion in the District of Columbia concerning -- they're two separate licenses. And the main distinction between a pawnshop and a secondhand dealer is a pawnshop makes a short-term loan based off of the value of the item that's being presented where, versus a secondhand dealer, that...
NNAMDITook my gold chain when I was in college, but that's another story.
ROGERSExactly. A couple of mine, too. But -- so that's the main difference. The secondhand dealer is basically, as you described, selling used items. And, unfortunately, when the law -- well, fortunately, when the law was written, it did serve a purpose because the times were different. The society was different, and access to stolen merchandise was -- I would like to think was probably a little bit easier. So 1902 and subsequent years, the law made sense. But one of the things that in talking with his clients -- we had a meeting (unintelligible).
NNAMDIIn April. It's my understanding DCRA met with the storeowners in mid-April. How'd that meeting go?
ROGERSI think it went really well.
NNAMDIRobert Clayton, you think the same -- you feel the same way?
CLAYTONI think we had mixed feelings about the meeting. The storeowners left the meeting with the belief that we needed to have a legislative change and that the DCRA was limited in its abilities to help us. So we went about in drafting legislation that we would hope that Councilmember Graham would introduce on our behalf to completely change the licensing scheme to exempt these particular types of businesses from the licensing requirement. So that's how we left the meeting.
ROGERSAnd then for...
NNAMDICouncilmember Graham should be joining us later in the broadcast. Here's Eric Rogers.
ROGERSAnd from DCRA's perspective, again, the reason why I say that it went well is we're a regulatory agency, and we need to hear from the regulated interests what concerns them, what works and what doesn't work. And from that meeting, we were able to do some best practice research.
ROGERSWe looked to New York City and some other jurisdictions to see how they deal with secondhand dealers and actually came up with a proposed regulatory change, a regulation change that meets their clients' benefits but also, you know, just makes sense because one of the things that DCRA is charged with is reviewing the regulations -- reviewing the law to ensure that it accurately reflects current business activity.
ROGERSBusiness models change. I'll give you an example. You know, an athletic store, for example, that just sells athletic apparel in maybe 1980s, that -- in the 1980s was a perfect business model, and you can make a lot of money. But as new foods have come out, the little power bars and the like come out, it's an ancillary business activity that makes sense for their business model, so, hey, why shouldn't I make some more money and sell these things.
ROGERSWell, you do -- it does require an additional license. So that's one of the things that -- why I think that the meeting went well because we heard from the businesses. We looked into the law, and we changed the regulations to meet their interests and also to reflect current business practices.
NNAMDIAnd what those changes in the regulations are, we'll be discussing after a short break. But you can still join the conversation at 800-433-8850. Have you applied for a business license recently? How hard or how easy was the process? Send us a tweet, @kojoshow, email to firstname.lastname@example.org or simply go to our website, kojoshow.org, and join the conversation there. I'm Kojo Nnamdi.
NNAMDIWelcome back. Later in the broadcast, we'll be discussing the life of the legendary guitarist Doc Watson, who died yesterday at the age of 89. Right now, we're talking about a crackdown on businesses selling vintage or secondhand goods in Washington, D.C. Robert Clayton is an attorney representing Crooked Beat Records, one of the stores that was notified that it needed a secondhand business license. Eric Rogers is the acting business licensing administrator of the D.C. Department of Consumer and Regulatory Affairs.
NNAMDIAnd, Eric Rogers, you say after the meeting was held that you went back and looked over the regulations again, and you are now issuing new licenses. First, could you tell us whether there was still need to be action by the Council of District of Columbia on this matter?
ROGERSWell, again, I never will say that the Council of the District of Columbia shouldn't do something. So if the Council feels that they need to amend or change the business license regulations or law, I always defer to their authority. But in this particular instance, the agency does have the ability and the authority to amend our own regulations, which we've done, so...
NNAMDIHow have you amended the regulations?
ROGERSWell, what we did was we exempted out certain types of business activity from the secondhand dealer regs. So if you sell used books, magazines, pianos, rugs, tapestries, used clothing, garage sales, yard sales, painting, sculptures, drawings, etchings, engravings -- and I think I'm forgetting one other -- you are exempted from the secondhand dealer license requirement, and you're only required to get our easiest license, which is the general business license. You can get it online. It costs you $300 and somewhat, and you will get your license instantly.
NNAMDIRobert Clayton, it is my understanding that that is the license which most the people who you are representing have, the general business license. The new regulation seems to indicate that, now, that's all they're going to need. Are you satisfied with this at all?
CLAYTONWell, not having seen the new regulations, I hold -- withhold judgment on that. But specifically, what we're -- what we were concerned about was the requirement that people who sell used and vintage records, antiques, clothing, furniture and furnishings and jewelry of certain dollar value or less be exempted from the requirement. Now, we are heartened by the fact that the DCRA has now changed their regulations.
CLAYTONAt the April 12 meeting, we were left with a specific impression that the DCRA had no discretion in this regard, and the only way the issue could be resolved was by a complete legislative change. As a result of that, my clients asked me to take a stab at drafting new legislation from top to bottom, from the D.C. Code and the D.C. Municipal Regs to change the licensing requirement.
CLAYTONSo after that was done and we proposed those legislative changes, now we've heard from the DCRA that they do have some authority or discretion, and they can amend their licensing. One of the other concerns is whether the enforcement action will take place, given that, by June 30, the -- oh, excuse me, July 15, we've been given an extension of time within which to have a moratorium on enforcement. We hope that we can get this completely resolved by that date.
NNAMDIYou heard us mention some of the shops involved with names like Miss Pixie's, Meeps, Idle Time Books and GoodWood. Joining us now is D.C. Councilmember Jim Graham. He represents Ward 1, where quite a few of these shops are located. And as far as I know, he practically lives in one of those shops up on Georgia Avenue. Jim Graham, thank you so much for joining us.
MR. JIM GRAHAMThank you very much.
NNAMDIYou know what shop I'm talking about, don't you?
GRAHAMI think I do. I think I do, and I know, also, I'm the life of the party.
NNAMDIYes. Oh, yeah. That was the last time you were here and...
GRAHAMYes, that's right.
NNAMDI...now, you're the greatest used car shopper in the city. Take us back six or eight weeks, Jim Graham. Did you know that DCRA was beginning a crackdown on business license compliance? How did you first hear about it?
GRAHAMWell, I first heard about it from our constituent businesses who came to me almost immediately, and rightfully so, because, Kojo, this was not done in a business-friendly fashion. And, you know, I just can't believe that, you know -- and, by the way, Director Majett, who I've been in regular contact about this -- he's the head of DCRA -- agrees that there's got to be a different way to communicate, particularly with, you know, in any business in the District of Columbia.
GRAHAMBut these are small businesses, which we all consider to be the backbone of our economic prosperity. And so this was done in a heavy-handed manipulative fashion with people who were simply in the dark. They weren't doing anything illegal. They just didn't know what they should be doing necessarily. And as we've all found out since is, you know, it's a very complicated situation for even skilled lawyers or even Mr. Clayton who is there.
NNAMDIAs you've been hearing from your store owners, were they worried about stolen goods being sold in any of their stores?
GRAHAMOh, I mean, I think that's a reasonable consideration in terms of government regulation. I don't question that. But I think what we have here is the need for some fixers. Now, I...
NNAMDIHow -- what did you think about the fixer you just heard?
GRAHAMWell, I think that I have yet to see it in terms of the DCRA. Now, we could look at it, and we are considering Mr. Clayton's proposal. But the fact of the matter is -- and let me emphasize this -- is that in my regular contact with Director Majett, he has promised me emergency legislation from the mayor. And so we're waiting for that right now. As recently as yesterday, I believe I asked for the status and update on where that stands. Maybe Mr. Rogers can tell us.
NNAMDIWell, what Mr. Rogers just informed us, Councilmember Graham, is that DCRA is promulgating new regulations that not would -- require people who are selling used books, records or furniture, things of that nature, would not be required to get the secondhand license that they were previously required to get. They will be able to do it with a general business license. But we did not -- we were not sure whether DCRA could simply promulgate those regulations or whether action by the council would be necessary.
GRAHAMWell, I think the action by the council would be more expeditious, that's for sure. And so while you can always perceive by rulemaking, the council can do -- anything that can be done by rulemaking can be done by council actions. So my inclination at this point would be to introduce the emergency legislation. It would be very nice if we had it, you know, today, if it's that simple. It would be very nice if we have it today because then we could have it before the council next Tuesday.
NNAMDIHere are some of the more, I guess, questioning or some may even say cynical responses we're getting, Eric Rogers. We've got an email from Terry in Hyattsville, "They hadn't checked in 30 years, and, all of a sudden, somebody is checking. Sounds like somebody at DCRA saw a potential increased revenue stream." Was that, as far as you know, a consideration in any of the store?
ROGERSNo, it wasn't a consideration. I mean, if the government were concerned about revenue in this particular instance, we would've issued the $2,000 funds per day. And the fact that DCRA heard from the business owners, looked at the law, looked at the regulations, looked at best practices across the country and then came up with -- within our authority what we feel is an equitable solution for the business owners and also reflecting current business practices.
ROGERSLet's keep in mind, these laws has been there on the book since 1902. And DCRA along with MPD, the Department of Health and other regulatory agencies in the city do compliance checks every single day. The Alcoholic Beverage Regulation Administration does this exact same thing every single day for alcohol-regulated establishments, so...
NNAMDIWith the new regulations that are promulgated, if, in future, DCRA is going to check on the licenses of these businesses, will it also require the precedence of an MPD officer?
ROGERSNo. In this particular instance, since MPD is a part of the licensure requirements and the day-to-day monitoring of these types of establishments falls under MPD, that's why they were there. If we're going to a restaurant to do a compliance check, we would bring Department of Health because that's what the health inspectors are there for. If we're going to a gas station, we might bring the Department of Environment because that's what the Department of Environment's -- part of their regulatory framework is there for.
NNAMDIJim Graham, before we talk to a restaurant owner who I see is on the line, I get the impression that many of your constituents -- not a restaurant owner, a store owner -- many of your constituents who own businesses like this were particularly concerned about the presence of the MPD officer. It, for them, implied that they were somehow committing a crime.
GRAHAMWell, and I can understand that, can't you?
NNAMDIYes, I can.
GRAHAMYou know, I mean, there's a whole -- the whole approach to this was not correct. But I think we're now in a position where we can take steps to remedy it. I mean, I recall just several years ago -- and Mr. Rogers knows about this -- you know, the council consolidated all these licenses we thought under a basic business license. And I know one of my constituent businesses believed that they had a basic business license, and they believed that was sufficient.
GRAHAMSo I need a further explanation of why that didn't -- why that wasn't effective because we spent literally a couple of years on these issues with D.C. area licensing in creating this basic business license.
NNAMDIHere now is Katerina in Washington, D.C. Katerina, please identify yourself. You're on the air. Go ahead, please.
MS. KATERINA HERODOTOUHi. My name is Katerina Herodotou. And I'm the co-owner of both Meeps Vintage in Adams Morgan and Treasury Vintage in the U Street area.
NNAMDIGo right ahead, Katerina. What is your own observation about this?
HERODOTOUWell, I'm delighted to hear that the DCRA has considered giving us exemptions from this license. In our April meeting, Director Majett said he wouldn't be able to do something like that, and the only action we could take is change through the council, change of the law. So this is excellent news for us. We'd love to get it in writing, and we'd love to see the details of it so we could start, you know, resting easy and trusting that we can continue operating in this beautifully unique vintage community that we have in our city.
NNAMDIWell, you may not have it in writing, but, given the digital environment, you already have a permanent record of it because it was said here on the air. And so it's now in existence forever.
ROGERSAnd if I might, you know, just to respond to her and then also in response to what Councilmember Graham said, it will be in writing because it will be published this Friday in the District of Columbia Register. So an official comment period will begin on June 1. It's a 30-day comment period, so it's open to -- for public consumption and public comment. And then at the close of the comment period, obviously, DCRA will look at the comments and incorporate any changes that we need to. And the councilmember is right.
ROGERSSeveral years ago, the council engaged in a very long activity in amending the business license regulations in the city. And we do have a basic business license framework. That framework includes over 160-some-odd license categories of which the secondhand dealer license fall. So it's a basic business license, secondhand dealer -- it's really secondhand dealer and junk dealer endorsement on that license so...
NNAMDIKaterina, how long have you been in business in the city?
HERODOTOUWell, Meeps has been in the city for 20 years, but my partner and I acquired it earlier -- or last year in December.
NNAMDIAnd at the time you acquired it, you were not aware that you needed a different kind of license?
HERODOTOUNo. And we have been operating treasury for three years where we went through the DCRA to get our licenses, and they specifically told us a basic business license would suffice.
NNAMDIWell, Jim Graham, you have one constituent who seems to be happy that these new regulations are being -- that are being issued.
GRAHAMRight. Well, about this -- but let me just say this, Kojo, that if this is as simple and straightforward as it has been described -- and keep it in your mind that Director Majett told me that he wanted to use the emergency legislature approach -- I mean, why don't we just proceed to do it? Because the fact of the matter is that a DCRA rulemaking is going to delay this very considerably. So that's the question we'll be looking out in the next couple of days.
NNAMDISo the council might be looking at it. Jim Graham, thank you very much for joining us.
NNAMDIJim Graham is the councilmember representing Ward 1 where many of these shops have been located. Here is Dallas in Stafford, Va. Dallas, you're on the air. Go ahead, please.
DALLASYeah, Kojo. I just have a general question. Where were the employees of the licensing department when the people came and applied for their license? My wife and I have two small businesses in Stafford County. And when we went to get licenses, they inquired us, though, the nature of the business. And so they helped us out in determining what kind of license we needed. So what happened here? Where -- what -- why didn't the employees ask questions about what kind of license these people -- I mean, what kind of business people want to operate to help them get the right license?
NNAMDIWell, apparently, this did not occur when people were going to apply for their licenses, Robert Clayton. They were inspectors from DCRA accompanied by MTPD officials who essentially descended on these businesses. So the licensing department at that point was not involved.
CLAYTONThat's correct. And doing the raid process, it was just to see whether or not they had the licenses that they said they needed, whether it be a class A or class B license. And that's what it was. But some of the -- some of my clients have indicated to me that, at the time of the application, they were told that they didn't need a secondhand dealer license and that basic business license will be all they need.
ROGERSLet's clarify, if you don't mind, Kojo, I know it's your show.
ROGERSBut let's clarify. A basic business license is every type of license of which there are several categories 'cause there's a lot of misconceptions going on. So let's clear it up right now. Every single type of business license activity in the District of Columbia requires a basic business license. That's what you'll see on the license so...
NNAMDIHowever, if you're doing a particular kind of business, there are about 500 subcategories of business.
ROGERSA hundred sixty some odd, so -- but they're...
NNAMDIOne hundred and sixty, for which you need a different kind of license. I said that because we're moving ahead once you get the basic business license. You have heard...
ROGERSIt is a basic business license.
NNAMDIYou have heard what Eric Rogers had to say. You've heard what Jim Graham has to say. He thinks that the council process would be speedier. I guess you now have to consult with your clients to decide whether they're willing to go along with the DCRA regulations or whether they are still going to insist on some measure by the council.
CLAYTONThat's correct. From what I can see now, the DCRA's proposed amended rulemaking, it doesn't include several of the basic groups that were rated, and that is used record stores because from the language I see, it wouldn't be included. Also, stores that sell antique or vintage jewelry and also those who sell antique or vintage furniture and furnishings, those are three other groups that were targeted or at least were involved in part in the raids in April. And the fact that they were specifically left off the list concerns us, and we want to know why the DCRA...
NNAMDIWe will revisit this issue to see how this is all resolved, but, Eric Rogers, thank you very much for joining us.
ROGERSThank you for having me.
NNAMDIEric is the acting business licensing administrator at the D.C. Department Of Consumer And Regulatory Affairs. Robert Clayton, thank you for joining us.
NNAMDIRobert Clayton is an attorney representing Crooked Beat Records and that was one of the stores notified that it needed a secondhand business license. He also volunteered to represent the shared interests of other store owners. As I said, we'll continue to follow this item, but we've got to take short break. After that, we look on the life and career of the legendary Doc Watson. I'm Kojo Nnamdi.
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