Until now, the Legislature has been reluctant to act. New Jersey's check-cashing industry opposes the restrictions, saying it already is heavily regulated by the state. It also argues that the measures would not curb money laundering. At the same time, state and local law enforcement agencies often lack the training and equipment to unravel complex schemes to turn tainted cash into clean money. Check cashers, in particular, have been used to convert vast quantities of small bills into larger denominations that are easier to hide.
Business checks allow drug financiers to avoid a paper trail and dodge taxes.
Other legislation proposed in the Senate on Monday mirrors a set of bills introduced in the Assembly last week. Aimed at stopping the flow of illicit cash, the Senate and Assembly measures would increase penalties for money laundering by establishing minimum mandatory sentences. The bills would make the prison sentences for laundering drug profits at least as tough as those for selling narcotics. The other bills would make it a crime to cash checks without a license and revoke the license of check cashers convicted of money laundering. The Assembly bills do not limit the size of transactions that check cashers could handle.