The city of Portsmouth’s Pawn Shop and Second Hand Shop ordinance is on hold, at least for the time being.
At Monday night’s Portsmouth City Council meeting, Portsmouth City Solicitor John Haas said he needs to look deeper into the subject.
The city of Portsmouth is considering requiring pawnbrokers and second hand dealers report items purchased by their business to LEADSOnline, the nation’s largest online investigation system for law enforcement, providing rapid electronic access to transactions from thousands of reporting businesses.
During a public hearing on the ordinance, Portsmouth attorney Franklin T. Gerlach, who owns a pawn shop, Diamond Gem Lending Company, himself, told Council they can’t do what they are planning to do.
“One of the things that you should be aware of is the state of Ohio is the exclusive regulatory agency for pawn shops,” Gerlach said. “The authority of City Council does not exist to regulate pawn brokers. “
Gerlach said one the the regulations in the Ohio Revised Code requires pawn shops to furnish information to law enforcement. Gerlach said pawn shops must provide a description of all property purchased by the shop, the number of the pawn or purchase form used by the licensee. Locally that is currently done by hand by the pawn shop operators.
Gerlach said LEADS is not a government entity, but instead is a private company, and he questioned giving the individual personal information about the person selling or pawning the item to a private company, since laws demand that pawn shops keep personal information private.
“What happens when that gets out of their system?” Gerlach asked. “Would the city of Portsmouth have some liability because this private information is distributed and required by the City Council?”
“I think we probably need to step back and maybe recalculate what we’re going to do – if we’re going to move forward or not,” Haas said. “My concern is if the state of Ohio has preempted the authority of the cities to handle this type of issue, pawn shops, second hand shops. Obviously we can’t do anything now.”
Haas said he has not had a chance to study how other communities using the same system are doing it. He said he want to find out if those governments are requiring the companies to utilize LEADS or if it is voluntary. He said he will reach out to the Municipal League and the city of Columbus to determine how it is being done there.
“I would just say let’s hold off and see if I can do some research and meet with Mr. Gerlach and determine what we can do if anything,” Haas said.
Two other types of businesses were represented at the meeting – consignment shops and a scrap metal company. Haas said neither of them is covered by the ordinance.
Portsmouth Police Chief Robert Ware said the ordinance also assists the pawn shops.
“Property owners can put their information into this system as well,” Ware said. “So when the pawn shop runs that transaction they’re going to know who that belongs to and if it’s not the owner trying to sell or get a loan on that property, that sends a red flag to the business. The whole idea is to protect as much as possible the business owner’s eyes, the property owner’s eyes and to make our job a little more expiditious.”
After Haas does more research it is possible Council will bring the item back to the City Manager’s Conference Agenda for future introduction as an ordinance.