City Council Requests Federal Help in Fight Against Black Market for Temporary License Plates

The New York City Council is asking the federal government to get in on the fight against temporary license plate fraud, arguing that the illegal out-of-state paper tags inundating city streets require a national solution.

In a letter sent Thursday to U.S. Transportation Secretary Pete Buttigieg, Council Member Oswald Feliz and 32 other city lawmakers called on the federal Department of Transportation to make it harder for people to open sham car dealerships and sell so-called temp tags illegally – a practice that a Streetsblog investigation found to be common. The legislators also called on the federal government to outlaw temp tags that are valid for longer than 30 days.

Illegal paper license plates flow through a vast underground economy, with counterfeiters and unscrupulous car dealers selling them to drivers who use the tags to avoid accountability on the road, Streetsblog found. During the pandemic, some New Yorkers opened bogus car dealerships in states with loose used car industry regulations, such as Texas, Georgia and New Jersey, then sold tags illegally to New Yorkers with no car insurance, unregistered cars or more nefarious reasons for driving with the paper tags.

In the letter, the lawmakers ask the federal government to “ensure only dealerships that actually sell cars are granted the right to issue paper plates.” To do so, the Council members suggest mandating that dealerships have “physical space for the sale of cars,” and that regulators can inspect those facilities.

But both of those requirements are already in place in states like New Jersey, which nevertheless became a major source of fraudulent temp tags during the pandemic.

And as for long-duration temp tags – the other issue on which the Council requested federal intervention – Streetsblog did not find them to be a major cause of temp tag fraud.

In New Jersey, for example, temp tags are valid only up to 30 days, but that did not prevent fraudulent New Jersey temp tags from becoming common in the city during the pandemic.

At least 75 licensed New Jersey dealers have been caught violating temp tag regulations in recent years, and those dealers have issued 224,000 temp tags since 2019, Streetsblog found by analyzing state data and records obtained through public records requests.

The Council letter also suggests requiring dealerships to actually have cars “available” for sale.

A U.S. DOT spokesperson, who declined to provide their name, declined to comment on the letter, saying the agency would discuss the matter with the Council directly.

The letter follows two Council bills that Feliz introduced in April aimed at fighting temp tag fraud. If passed, the legislation would create fines for people caught illegally selling tags and increase fines for people driving with them. The bills are pending in the Council.

On Thursday, Feliz introduced a third bill related to the issue – this one to require the New York City Police Department to have sufficient space in its tow pounds to store confiscated cars.

In a hearing on Feliz’s temp tag bills in June, Michael Pilecki, deputy chief of the NYPD’s Transportation Bureau, said the agency needed more space in its tow pounds to store confiscated cars, like those with illegal paper license plates.

An NYPD spokesperson, who declined to provide their name, said the NYPD is reviewing the legislation.