Law:Division 8. Pawnbrokers (California)

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Contents

Chapter 1. General Provisions

Article 1. Definitions

Ca Codes (fin:21000-21002) Financial Code Section 21000-21002



21000. Every person engaged in the business of receiving goods, including motor vehicles, in pledge as security for a loan is a pawnbroker within the meaning of this division.


21000.7. As used in this division "receiving goods as security for a loan" does not include a good faith purchase of goods.


21001. "Compensation" includes expenses, interest, disbursements, storage charges, and all other charges of any nature in connection with a loan or forbearance.


21002. (a) As used in this division, "pledged property" is property held as security for a loan, the title to which remains with the pledgor and has not passed to the pawnbroker pursuant to Section 21201. (b) "Vested property" is property the title to which has been transferred from the pledgor to the pawnbroker pursuant to Section 21201. Vested property is not pledged property.


Article 2. Exceptions To This Division

Ca Codes (fin:21050-21051) Financial Code Section 21050-21051



21050. This division does not apply to any of the following: (a) Any corporation organized for the purpose of securing credit from any federal intermediate credit bank organized and existing pursuant to the provisions of an act of Congress entitled "Agricultural Credits Act of 1923." (b) Any nonprofit cooperative corporation or association with or without capital stock, organized or existing pursuant to Chapter 1 (commencing with Section 54001) of Division 20 of the Food and Agricultural Code. (c) Any person, corporation, association, syndicate, joint stock company, or partnership, engaged exclusively in the business of marketing agricultural, horticultural, viticultural, dairy, livestock, poultry, and bee products on a cooperative nonprofit basis.

21051. (a) The limitations with respect to rates and charges set forth in Sections 21200 and 21200.5 do not apply to any loan of a bona fide principal amount of two thousand five hundred dollars ($2,500) or more if this section is not used for the purpose of evading this division. (b) In determining whether a loan is a loan of the principal amount of two thousand five hundred dollars ($2,500), Section 22054 shall apply.


Chapter 2. Pawnbroker Regulations

Ca Codes (fin:21200-21209) Financial Code Section 21200-21209



21200. (a) Except as otherwise provided in this chapter, no pawnbroker shall charge or receive compensation at a rate exceeding the sum of the following: (1) Two and one-half percent per month on that portion of the unpaid principal balance of any loan up to, including, but not in excess of two hundred twenty-five dollars ($225). (2) Two percent per month on that portion of the unpaid principal balance of the loan in excess of two hundred twenty-five dollars ($225) up to, including, but not exceeding nine hundred dollars ($900). (3) One and one-half percent per month on that part of the unpaid principal balance in excess of nine hundred dollars ($900) up to and including, but not in excess of, one thousand six hundred fifty dollars ($1,650). (4) One percent per month on any remainder of the unpaid principal balance in excess of one thousand six hundred fifty dollars ($1,650). (5) A charge not exceeding three dollars ($3) a month on any loan when the monthly charge permitted by this section would otherwise be less than that minimum charge. (b) One month's interest may be charged for any part of the month in which pawned property is redeemed.


21200.1. A loan setup fee not to exceed five dollars ($5) or 2 percent, whichever is greater, may be charged for each loan. However, the maximum loan setup fee shall not exceed ten dollars ($10). Loan setup fees are in addition to any other allowed charges.


21200.5. A pawnbroker may charge as prescribed in the following schedule: Schedule of Charges (a) A charge not exceeding one dollar ($1) may be made on any loan for not more than 30 days which does not exceed fourteen dollars and ninety-nine cents ($14. 99). (b) A charge not exceeding three dollars ($3) may be made on any loan for not more than 90 days of fifteen dollars ($15) or more, but not exceeding nineteen dollars and ninety-nine cents ($19.99). (c) A charge not exceeding four dollars ($4) may be made on any loan for not more than 90 days of twenty dollars ($20) or more, but not exceeding twenty-four dollars and ninety-nine cents ($24.99). (d) A charge not exceeding five dollars ($5) may be made on any loan for not more than 90 days of twenty-five dollars ($25) or more, but not exceeding thirty-nine dollars and ninety-nine cents ($39.99). (e) A charge not exceeding six dollars ($6) may be made on any loan for not more than 90 days of forty dollars ($40) or more, but not exceeding forty-nine dollars and ninety-nine cents ($49.99). (f) A charge not exceeding seven dollars and fifty cents ($7.50) may be made on any loan for not more than 90 days on any loan of fifty dollars ($50) or more, but not exceeding sixty-four dollars and ninety-nine cents ($64.99). (g) A charge not exceeding eight dollars and fifty cents ($8.50) may be made on any loan for not more than 90 days of sixty-five dollars ($65) or more, but not exceeding seventy-four dollars and ninety-nine cents ($74.99). (h) A charge not exceeding ten dollars ($10) may be made on any loan for not more than 90 days of seventy-five dollars ($75) or more, but not exceeding ninety-nine dollars and ninety-nine cents ($99.99). (i) A charge not exceeding twelve dollars and fifty cents ($12.50) may be made on any loan for not more than 90 days of one hundred dollars ($100) or more, but not exceeding one hundred twenty-four dollars and ninety-nine cents ($124.99). (j) A charge not exceeding thirteen dollars and fifty cents ($13.50) may be made on any loan for not more than 90 days of one hundred twenty-five dollars ($125) or more, but not exceeding one hundred forty-nine dollars and ninety-nine cents ($149.99). (k) A charge not exceeding fifteen dollars ($15) may be made on any loan for not more than 90 days of one hundred fifty dollars ($150) or more, but not exceeding two hundred twenty-four dollars and ninety-nine cents ($224.99). (l) A charge not exceeding twenty dollars ($20) may be made on any loan for not more than 90 days of two hundred twenty-five dollars ($225) or more, but not exceeding three hundred twenty-four dollars and ninety-nine cents ($324.99). (m) A charge not exceeding twenty-five dollars ($25) may be made on any loan for not more than 90 days of three hundred twenty-five dollars ($325) or more, but not exceeding four hundred forty-nine dollars and ninety-nine cents ($449.99). (n) A charge not exceeding thirty-five dollars ($35) may be made on any loan for not more than 90 days of four hundred fifty dollars ($450) or more, but not exceeding five hundred ninety-nine dollars and ninety-nine cents ($599.99). (o) A charge not exceeding forty-five dollars ($45) may be made on any loan for not more than 90 days of six hundred dollars ($600) or more, but not exceeding seven hundred ninety-nine dollars and ninety-nine cents ($799.99). (p) A charge not exceeding fifty-five dollars ($55) may be made on any loan for not more than 90 days of eight hundred dollars ($800) or more, but not exceeding nine hundred ninety-nine dollars and ninety-nine cents ($999.99). (q) A charge not exceeding seventy dollars ($70) may be made in any loan for not more than 90 days of one thousand dollars ($1,000) or more, but not exceeding eleven hundred ninety-nine dollars and ninety-nine cents ($1,199.99). (r) A charge not exceeding eighty-five dollars ($85) may be made on any loan for not more than 90 days of twelve hundred dollars ($1,200) or more, but not exceeding fourteen hundred ninety-nine dollars and ninety-nine cents ($1,499.99). (s) A charge not exceeding one hundred dollars ($100) may be made on any loan for not more than 90 days of fifteen hundred dollars ($1,500) or more, but not exceeding seventeen hundred ninety-nine dollars and ninety-nine cents ($1,799.99). (t) A charge not exceeding one hundred twenty dollars ($120) may be made on any loan for not more than 90 days of eighteen hundred dollars ($1,800) or more, but not exceeding two thousand ninety-nine dollars and ninety-nine cents ($2,099.99). (u) A charge not exceeding one hundred forty dollars ($140) may be made on any loan for not more than 90 days of twenty-one hundred dollars ($2,100) or more, but not exceeding twenty-four hundred ninety-nine dollars and ninety-nine cents ($2,499.99). (v) The charge for any extension or renewal of a loan covered by this section shall be computed in accordance with the provisions of Section 21200. The schedule of charges prescribed by this section shall be posted in a place clearly visible to the general public.


21200.6. (a) In addition to other allowed charges, at the time property is redeemed a pawnbroker may collect a handling and storage charge for certain pawned articles. Irrespective of the duration of the loan, the maximum amount that may be charged pursuant to this section is in accordance with the following schedule: (1) Five dollars ($5) for any article that cannot be contained within one cubic foot. (2) Ten dollars ($10) for any article that cannot be contained within three cubic feet. (3) Twenty dollars ($20) for any article that cannot be contained within six cubic feet and one dollar ($1) for each additional cubic foot in excess of six cubic feet. (b) No storage charge is allowed for any article that can be contained within one cubic foot. (c) For purposes of this section, cubic feet shall be determined by multiplying the width of an article, at its greatest width, by the depth of an article, at its greatest depth, by the height of an article, at its greatest height.


21200.7. The maximum charge of compensation charged by a pawnbroker pursuant to the authority of Section 21200 shall be posted in a place clearly visible to the general public.


21200.8. In addition to other allowed charges, a pawnbroker may collect a processing charge of four dollars ($4) for each firearm pawned.

21200.9. No licensed pawnbroker shall promise any seller of tangible personal property that the seller may repurchase property sold to the pawnbroker.

21201. Every loan made by a pawnbroker for which goods are received in pledge as security shall be evidenced by a written contract, a copy of which shall be furnished to the borrower. The loan contract shall provide a four-month loan period, shall set forth the loan period and the date on which the loan is due and payable, and shall clearly inform the borrower of his or her right to redeem the pledge during the loan period. Every loan contract shall contain the following notice, in at least 8-point boldface type and circumscribed by a box, immediately above the space for the borrower's signature: "You may redeem the property you have pledged at any time until the close of business on ____ �fill in date four months from date loan begins). To redeem, you must pay the amount of the loan and the applicable charges which have accrued through the date on which you redeem." Every pawnbroker shall retain in his or her possession every article pledged to him or her for a period of four months. During such period the borrower may redeem the articles upon payment of the amount of the loan and the applicable charges. If the borrower and the pawnbroker agree in writing that the pawned property may be stored off premises, following the request for redemption of the loan, the pawnbroker shall return the pledged property to the consumer the next calendar day when both the pawnbroker's store and the storage facility are open, not to exceed two business days. If any pledged article is not redeemed during the four-month loan period as provided herein, and the borrower and pawnbroker do not mutually agree in writing to extend the loan period, the pawnbroker shall notify the borrower within 30 days after expiration of the loan period. If the pawnbroker fails to notify the borrower within 30 days after the expiration of the loan period, the pawnbroker shall not charge interest from the day after the expiration of the 30-day period. The pawnbroker shall notify the borrower at his or her last known address of the termination of the loan period, by a means for which verification of mailing or delivery of the notification can be provided by the pawnbroker, and extending the right of redemption, during posted business hours, for a period of 10 days from date of mailing of that notice. The 10-day notice shall include a statement that: "If the tenth day falls on a day when the pawnshop is closed, the time period is extended to the next day that the pawnshop is open." However, the posted schedule of charges required pursuant to Section 21200.5 shall contain a notice informing the borrower that if he or she desires, the pawnbroker shall send the notice of termination of the loan period by registered or certified mail with return receipt requested, upon prepayment of the mailing costs. If any pledged article is not redeemed within the 10-day notice period, the pawnbroker shall become vested with all right, title, and interest of the pledgor, or his or her assigns, to the pledged article, to hold and dispose of as his or her own property. Any other provision of law relating to the foreclosure and sale of pledges shall not be applicable to any pledge the title to which is transferred in accordance with this section. The pawnbroker shall not sell any article of pledged property until he or she has become vested with the title to that property pursuant to this section. The sale of pledged property is a misdemeanor pursuant to Section 21209.


21201.1. Whenever a pledger, or his or her assignee, loses a pawn ticket, a fee of not to exceed ten dollars ($10) may be charged for services of verifying the identification of the claimant, fingerprinting the claimant, and having the claimant execute a declaration under penalty of perjury.


21201.2. If the pledgor fails to redeem any pawned item during the loan period, thereby obliging the pawnbroker to mail the notice required under Section 21201, the pawnbroker may charge a fee of up to three dollars ($3) for services and costs pertaining to the preparation of the notice, in addition to any other allowed charges.


21201.3. (a) The written contract required pursuant to Section 21201 shall contain a provision in 8-point type stating whether the item or items pledged are to be stored at the business premises of the pawnbroker and adjacent to this provision, the following disclosure shall be made: "We must return your property within two business days if your property is stored off premises." (b) Every pawnbroker shall display a sign at his or her premises indicating whether or not pawned items are insured. (c) If a pawnbroker stores pledged property at a location other than the pawnshop, the pawnbroker shall post a conspicuous sign stating that pawned items may be stored off premises with the consent of the pledgor and that following the redemption of a loan, property is required to be returned the next calendar day upon which both the pawnbroker's store and the storage facility are open, not to exceed two business days. (d) Notwithstanding Section 21209, a violation of this section is an infraction. (e) This section shall become operative July 1, 1995.


21201.4. Charges for the first 90 days of any loan made pursuant to the written contract required by Section 21201 shall be determined by the application of the schedule of charges contained in Section 21200.5. Charges for any period of time following the first 90 days of the loan shall be determined by application of the schedule of maximum compensation contained in Section 21200.


21201.5. A pledgor may request, and a pawnbroker may consent to, a new loan to take effect upon or at any time after the expiration of the loan period stated in the original loan contract delivered to the pledgor under Section 21201. The pledgor shall pay in cash or another form acceptable to the pawnbroker all of the charges and interest due under the original loan, and the remaining unpaid balance of the actual amount borrowed under the original loan shall be debited to the new loan on which the same article or articles are pledged. The loan to which the debit is applied shall be processed as a new loan and shall be deemed to be a new loan subject to loan origination fees, storage fees, and other fees permitted by this chapter, when applicable. The new loan contract required by Section 21201 shall disclose the amount of the original loan that is debited to the new loan.


21202. Every pawnbroker shall enter at the time of the transaction, in records of loans and pledges kept by him for that purpose, the date, duration, amount, and rate of interest or charges of every loan made by him, a reasonably accurate description of the property pledged, the name and residence address of the pledgor. Every pawnbroker shall deliver to the pledgor a written copy of such entry. Such written copy need not include the name and address of the pledgor.

21203. Any property held in pawn which is not subject to a hold pursuant to Section 21647 of the Business and Professions Code shall be returned to the pledgor immediately upon redemption of the loan. However, if the property is stored off the business premises of the pawnbroker, following the redemption of the loan the property shall be returned the next calendar day when both the pawnbroker's store and the storage facility are open, not to exceed two business days.


21204. Every pawnbroker, upon redemption of a loan contract, shall provide the borrower with a receipt that correctly states in detail all of the fees, charges, and compensation paid by the borrower to the pawnbroker.

21206. Every pawnbroker shall produce his or her records of loans and all pledged property, for inspection by the following persons: (a) Any officer holding a warrant authorizing him or her to search for personal property. (b) Any peace officer or employee designated by the chief of police or sheriff. (c) Any officer holding a court order directing him or her to examine such records or pledged property.


21206.7. Whenever any property is taken from a pawnbroker by a peace officer which is alleged to be stolen property, the police officer shall give the pawnbroker a receipt for the property which shall contain a description of the property, the reason for seizure, and the names of the pawnbroker and the officer.


21206.8. (a) Notwithstanding the provisions of Chapter 12 (commencing with Section 1407) of Title 10 of Part 2 of the Penal Code, whenever property alleged to have been stolen or embezzled is taken from a pawnbroker, the peace officer, magistrate, court, clerk, or other person having custody of the property shall not deliver the property to any person claiming ownership unless the provisions of this section are complied with. (b) (1) If any person makes a claim of ownership, the person having custody of the property shall notify the pawnbroker. (2) If the pawnbroker makes no claim with respect to the property within 10 days of such notification, the property may be disposed of as otherwise provided by law. (c) If property alleged to have been stolen or embezzled is taken from a pawnbroker, prior to any disposal of the property pursuant to Section 1411 of the Penal Code, the notice to be given to the owner and owner of a security interest pursuant to Section 1411 shall be given to the pawnbroker. Such property shall not be disposed of pursuant to Section 1411 until three months after such notice has been given. (d) A pawnbroker shall not be liable to any person for any property seized from the pawnbroker on account of the pawnbroker's inability to return the property to that person because of the seizure.

21207. No pawnbroker shall receive anything in pledge from any person who is a minor.


21208. Every pawnbroker shall report daily or on the first working day after receipt or purchase, all descriptions of all property received in pledge or purchased as tangible personal property, as defined in Section 21627 of the Business and Professions Code, in whatever quantity received, including property purchased as tangible personal property at wholesale, tangible personal property taken in for sale or possessed on consignment for sale, and tangible personal property taken in trade. If the transaction took place within the territorial limits of an incorporated city, the report shall be submitted to the police chief executive of the city or his or her designee, by mail unless otherwise agreed upon by the pawnbroker and the police chief executive or his or her designee. If the transaction took place outside the territorial limits of an incorporated city, the report shall be submitted to the sheriff of the county or his or her designee, by mail unless otherwise agreed upon by the pawnbroker and the sheriff or his or her designee. All reports shall be on forms approved or provided at actual cost by the Department of Justice. The police chief executive or sheriff who receives a report on a form filed pursuant to the provisions of this section shall daily submit a legible copy of the transactions to the Department of Justice.

21209. The violation of any provision of this chapter under circumstances where a person knows or should have known that a violation was being committed is a misdemeanor.


Chapter 3. Licensure

Ca Codes (fin:21300-21307) Financial Code Section 21300-21307



21300. (a) The chief of police, the sheriff, or, where appropriate, the police commission, shall accept an application for and grant a license permitting the licensee to engage in the business of pawnbroker, as defined in Section 21000, at the address indicated on the application, to an applicant who has complied with the requirements of Sections 21303, 21304, and 21305 and has not been convicted of an attempt to receive stolen property or any other offense involving stolen property. Prior to the granting of a license, the licensing authority shall submit the application to the Department of Justice. If the Department of Justice does not comment on the application within 30 days thereafter, the licensing authority shall grant the applicant a license. All forms for application and licensure, and license renewal, shall be prescribed and provided by the Department of Justice. A fee not to exceed the actual processing costs to the Department of Justice and the chief of police, the sheriff, or where appropriate, the police commission may be charged to the applicant for processing the initial license application. (b) For the purposes of this section, "convicted" means a plea or verdict of guilty or a conviction following a plea of nolo contendere. (c) Notwithstanding subdivisions (a) and (b), no person shall be denied a pawnbroker's license solely on the grounds that he or she violated any provision contained in Chapter 1 (commencing with Section 21000) or Chapter 2 (commencing with Section 21200) of this division or Article 4 (commencing with Section 21625) or Article 5 (commencing with Section 21650) of Chapter 9 of Division 8 of the Business and Professions Code unless the violation demonstrates a pattern of conduct.

21300.1. It is unlawful for any person who is not duly licensed under this section to act as a pawnbroker or represent himself, herself, or a business entity to be a pawnbroker or a pawnbrokerage business entity.

21301. (a) A license granted pursuant to Section 21300 shall be renewable the second year from the date of issue, and every other year thereafter, upon the filing of a renewal application and compliance with the requirements of Section 21303. The Department of Justice and the chief of police, the sheriff, or, where appropriate, the police commission may charge a fee for the license renewal not to exceed the actual processing costs. The licensing authority shall collect the fee and transmit the fee and a copy of the renewed license to the Department of Justice. (b) The license shall be subject to forfeiture by the licensing authority, and the licensee's activities as a pawnbroker shall be subject to being enjoined pursuant to Section 21302, for breach of any of the following conditions: (1) The business shall be carried on only at the location designated on the license. The license shall designate all locations where property belonging to the business is stored. Property of the business may be stored at locations not designated on the license only with the written consent of the local licensing authority. (2) The license or a copy thereof, certified by the licensing authority, shall be displayed on the premises in plain view of the public. (3) The licensee shall not engage in any act that the licensee knows to be in violation of this article. (4) The licensee shall not be convicted of an attempt to receive stolen property or other offense involving stolen property. For the purposes of this paragraph, "convicted" means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action that the chief of police, the sheriff, or, where appropriate, the police commission, is permitted to take following that conviction may be taken when the time for appeal has elapsed, the judgment of conviction has been affirmed on appeal, or an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under Section 1203.4 of the Penal Code. (c) Notwithstanding subdivisions (a) and (b), no renewal application for a pawnbroker's license may be denied, nor may his or her pawnbroker's license be forfeited, solely on the grounds that the applicant violated any provision contained in Chapter 1 (commencing with Section 21000), Chapter 2 (commencing with Section 21200) of this division, or Article 4 (commencing with Section 21625) or Article 5 (commencing with Section 21650) of Chapter 9 of Division 8, of the Business and Professions Code unless the violation demonstrates a pattern of conduct.


21301.1. It is unlawful for any person to advertise his or her services as a pawnbroker, or to use any words or parts of words in any advertisements that connote a transaction involving the taking of tangible personal property as security for a loan unless the pawnbroker's license number is clearly displayed in the advertisement.


21302. The district attorney or the Attorney General, in the name of the people of the State of California, may bring an action to enjoin the violation or the threatened violation of any regulation made pertaining to the provisions contained in Chapter 1 (commencing with Section 21000) or Chapter 2 (commencing with Section 21200) of this division or Article 4 (commencing with Section 21625) or Article 5 (commencing with Section 21650) of Chapter 9 of Division 8 of the Business and Professions Code. Any proceeding brought hereunder shall be governed in all respects by the provisions of Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure.


21303. (a) As a condition precedent to the issuance or renewal of a pawnbroker's license the applicant shall file a pawnbroker's two-year nonrevokable surety bond with the issuing authority, in the sum of twenty thousand dollars ($20,000). The pawnbroker's bond required by this article shall be executed by an admitted surety in favor of the State of California and shall be filed by the applicant with the licensing authority. (b) The bond shall be for the benefit of pledgors of pledged property when the property is not available for redemption, due to the criminal negligence, criminal malfeasance, or other criminal conduct of the pawnbroker, and the pledgor has complied with the conditions precedent to redemption under the terms of the loan contract. The pledgor has the burden of establishing by clear and convincing evidence that all conditions precedent to redemption under the terms of the loan contract have been performed.


21304. (a) As a condition precedent to the issuing of a pawnbroker' s license, the applicant shall file with the issuing authority a financial statement confirming that the applicant has at least one hundred thousand dollars ($100,000) in the form of liquid assets readily available for use in each licensed business for which the application is made, not including real property, or, in the absence of one hundred thousand dollars ($100,000), an applicant may post a nonrevocable surety bond in the amount of one hundred thousand dollars ($100,000) or the applicant may, in lieu of posting a surety bond, deposit money, certificates, accounts, bonds, or notes, as provided in Section 995.710 of the Code of Civil Procedure. The financial statement shall be filed by the applicant under penalty of perjury and signed by a California certified public accountant verifying that he or she has reviewed the financial statement. (b) This section does not apply to any person holding a secondhand dealer's license pursuant to Section 21641 or 21642 of the Business and Professions Code who is actively engaged as a pawnbroker on the effective date of this section.


21305. A license issued pursuant to this chapter shall not be transferred or assigned.


21306. A pawnbroker licensed under Section 21300 is exempt from the licensing requirements under Sections 21641 and 21642 of the Business and Professions Code and may engage in any transaction involving tangible personal property for which a secondhand dealers license is required under Sections 21641 and 21642 of the Business and Professions Code. Pawnbrokers operating under this license exemption are required to conform to all other requirements of secondhand dealers for which a license is required under Sections 21641 and 21642 of the Business and Professions Code.


21307. Except as otherwise specifically provided, the violation of any provision of this chapter under circumstances where a person knows or should have known that a violation was being committed is a misdemeanor.


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