H. B. 4039

(By Delegates Douglas, Trump and Faircloth)
[Introduced January 14, 2000; referred to the
Committee on the Judiciary then Finance.]

A BILL to amend chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article twenty-five, relating to the regulation of pawnbrokers; providing that the superintendent of the West Virginia state police has rule-making authority regulating pawnbrokers; establishing license requirements and fees for pawnbrokers; creating requirements for pawn transactions; disclosure requirements for pawn transactions established; limitations on pawn agreements and practices; providing for restitution to pawnbrokers and buyers of property unlawfully obtained; prohibiting unfair trade practices; establishing criminal penalties for violations of licensing requirements and for pawning, selling or retaining stolen property, and using false identification to pawn or sell property.

Be it enacted by the Legislature of West Virginia:
That chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article twenty-five, to read as follows:
§47-25-1. Definitions.

(a) "Pawnbroker" means any person, partnership, association or corporation advancing money in exchange for collateral of the pledgor in a pawn transaction.
(b) "Pawn transaction" is a transaction between a pawnbroker and a pledgor where the pledgor's property is placed in the possession of the pawnbroker as security for money or other valuable consideration provided to the pawnbroker on the condition that the pledgor may pay a pawn charge and redeem his or her property within a predetermined time frame: Provided, That pawn transactions do not include those transactions where securities or printed evidence of indebtedness are used as security for the transaction.
(c) "Pledge" means an article or articles of property deposited with a pawnbroker as collateral for the guarantee of performance of a pawn agreement.
(d) "Pledgor" means a person who delivers the pledge into the possession of a pawnbroker, unless such person discloses that he or she is or was acting for another, and in such an event "pledgor" means the disclosed principle.
(e) "Superintendent" as used in this article refers to the superintendent of the West Virginia state police.
§47-25-2. Licensing requirements for pawnbrokers; powers and duties of the superintendent of state police.
(a) After the first day of July, two thousand one, no person may engage or continue in business as a pawnbroker except as authorized by this article, and without first obtaining a license from the West Virginia state police. No person other than a licensee under this article may:
(1) Display any sign or other device in or about the premises of a business, or use any advertising or printing matter which in anyway resembles an emblem or sign commonly used by pawnbrokers;
(2) Display any sign which is likely to deceive the public that a business or person conducts pawnbroker transactions, nor use the word "pawnbroker" in or about the premises of a business or in any advertising matter or other printed materials; or
(3) Represent to the public that he or she is a pawnbroker, either through advertising, soliciting, signs or otherwise.
(b) To receive a license, persons must be residents of the state and at least eighteen years of age. The superintendent shall deny the permit of any person convicted of a felony.
(c) The superintendent shall propose for promulgation, legislative rules for the regulation of pawnbrokers pursuant to this article and in accordance with the provisions of article three, chapter twenty-nine-a of this code. These rules shall include the following:
(1) Periodic reporting procedures for pawnbrokers and any other requirements for pawnbrokers necessary to effectuate the provisions of this article.
(2) Provisions for municipal police departments to assume primacy in collection and receipt of any periodic reporting as this article may require: Provided, That nothing in the provisions of this article prevents or limits the authority of any municipality from requiring an additional fee or permit for any pawn business located therein.
(3) Guidelines for pawnbrokers to share report information with law-enforcement officers of other states to assist tracking of stolen property.
(d) Upon receipt of an application for a pawnbrokers license, the superintendent, upon verification of all licensing requirements and receipt of payment of the licensing fee, shall issue a two-year license to the applicant to do business in this state as a pawnbroker. Separate applications and licenses are required for each pawnbroker store location. The superintendent shall charge for a license such fee as he or she shall proscribe by legislative rule, sufficient to cover the cost of administering this article, but in no case may the license fee exceed five hundred dollars. The license shall run from the date of issuance to the end of the biennial period. When the initial license is issued in the second year of the biennial licensing period, the license fee shall be an amount equal to one half of the fee for the biennial licensing period.
§47-25-3. Requirements of licensed pawnbrokers.
(a) No pawnbroker may sell any pledge until it has been in his or her possession for three months, unless a shorter period of not less than thirty days is agreed to in writing by the pledgor.
(b) Each pawnbroker licensed pursuant to the provisions of this article shall be required by the superintendent of the state police to furnish proof that he or she is adequately covered by bond, insurance, or cash surplus to cover the pledge value of any pledged property in the event of loss by fire, theft, burglary or otherwise.
(c) All pawnbrokers shall always display actual business hours on the front door or other location clearly visible to the public.
(d) Items bought, except on invoice from a manufacturer or wholesaler with an established place of business, shall be held for ten days before being disposed of or sold.
(e) All pawnbrokers shall obtain a written declaration of ownership from each seller or pledgor on all sale or pawn transactions, except for refinance pawn transactions or merchandise bought from a manufacturer or wholesaler with an established place of business. The declaration of ownership shall appear on the bill of sale or pawn ticket, to be completed by the seller or pledgor at the time of the transaction. The declaration of ownership shall state the length of time the pledgor or seller has owned the pledged property.
(f) Every pawnbroker shall keep at his or her place of business an accurate and legible record recorded in ink or other permanent recordation method, of each transaction made in the course of his or her business. The record shall be made at the time of the transaction and shall include:
(1) A description of the make, manufacturer, model, model number, size, shape, serial number, year of manufacture of the property received;
(2) The time, date and place of the transaction;
(3) A transaction number for each individual piece of property received;
(4) The full name, residence address and home telephone number of the person or persons pledging, together with a personal description, including the height, weight, date of birth, social security number, hair and eye color, and any other identifying marks, of such person or persons;
(5) A record of the verification of the identity of the pledgor shall be kept. This verification shall be made by the exhibition of a state-issued identification card, driver's license or federal passport or other government-issued photo identification card. The record shall contain the type of identification exhibited, the issuing agency and the number thereon. Such card shall be examined by the pawnbroker, and an appropriate record retained thereof;
(6) In addition to the information required in subdivision (1) of this subsection, a description of firearms shall include in their description the color, caliber and size.
(g) Every pawnbroker and every employee of the pawnbroker shall admit to the pawnbroker's place of business during regular business hours, the chief law-enforcement officer, or his or her designee, of the jurisdiction where his business is being conducted, or any law-enforcement official of the state or federal government. The pawnbroker or employee shall permit the officer to: (1) Examine all records required by this section and any article listed in a record which is believed by the officer to be missing or stolen; and (2) search for and take into possession any article known to him or her to be missing, or known or believed by him or her to have been stolen.
§47-25-4. Required transaction reporting.
Every pawnbroker shall each day prepare a report in a form prescribed by the superintendent of all transactions conducted by the pawnbroker that day. The pawnbroker shall file such report within seventy-two hours of a request by a law-enforcement officer of this state, county, city, or town where his or her business is conducted as prescribed by the superintendent: Provided, That merchandise bought on invoice from a manufacturer or wholesaler with an established place of business is exempt from this reporting requirement.
The report shall include:
(1) The name, address and telephone number of the pawnshop;
(2) All information required by subdivisions (1), (2),(3) and (6) in subsection (f) of section three of this article;
(3) The pawn transaction number and the time and date of the purchase or pledge of property.
§47-25-5. Pawnbroker disclosure requirements for pawn transactions.

Upon receipt of any pawned property, the pawnbroker shall deliver to the pledgor a pawn ticket on which shall be legibly written or printed the name of the pledgor, the name of the pawnbroker and the place where the pledge was made, a description of the article or articles pledged; date of the transaction, the amount received, final date of redemption, and the amount required to redeem the property. Nothing appearing on a pawn ticket shall relieve the pawnbroker of the obligation to exercise reasonable care as provided in this article in the safekeeping of property pledged with the pawnbroker. No additional terms or conditions may be imposed for redemption of property that are not contained on the pledge ticket. A written receipt shall be provided to the pledgee for any moneys paid in payment or redemption of pawned property.
§47-25-6. Limitation on agreements and practices.
(a) Notwithstanding that a pawn transaction subject to this article creates a debtor/creditor relationship, no pawnbroker may make any agreement requiring the personal liability of a pledgor in connection with a pawn transaction, and no pledgor may have an obligation to redeem pledged goods or make any payment on a pawn transaction. Only property in the possession of the pawnbroker may serve as collateral for a pawn transaction. Except as otherwise provided in this article, the only recourse of a pawnbroker where the customer has pledged property shall be to the pledged property itself. Any pledged property not redeemed within thirty days following the last fixed maturity date may thereafter, at the option of the pawnbroker, may be forfeited and become the property of the pawnbroker.
(b) No licensed pawnbroker may:
(1) Accept a pledge or purchase property from a person under the age of eighteen years;
(2) Fail to exercise reasonable care to protect pledged property from loss or damage;
(3) Fail to return property to a customer upon payment of the full amount due the pawnbroker;
(4) Accept collateral or buy merchandise from a person unable to supply verification as provided in section three of this article;
(5) Purchase or take any article in pawn or pledge from any person appearing to be intoxicated or under the influence of any drug, nor from any person known by the pawnbroker to have been convicted of theft.
(c) When property possessed by a pawnbroker is found to be stolen, the property shall be returned to the rightful owner thereof or any law-enforcement officer of this state without the payment of the money advanced by the pawnbroker thereon or any costs or charges of any kind which the pawnbroker may have placed on the same.
(d) No property received pledged to any pawnbroker may be disfigured or its identity destroyed or affected in any manner while in pawn nor may any property be concealed for forty-eight hours after the property is received by the pawnbroker.
(e) Except as otherwise provided by this article, any person properly identifying himself or herself as the original pledgor in the pawn transaction or upon written evidence of assignment thereof, and presenting a pawn transaction ticket to the pawnbroker, shall be presumed to be entitled to redeem the pledged property described therein.
§47-25-7. Restitution to buyer and pawnbroker for property unlawfully obtained or sold.
(a) Upon a verdict or plea of guilty or upon a plea of nolo contendere for an offense in which any property is unlawfully obtained and the property is sold, traded or pawned to a pawnbroker, the court shall order the defendant to provide restitution to the pawnbroker for the consideration paid to the defendant for the stolen property. Such restitution shall be in addition to any other penalties provided by law.
(b) The buyer of any property from a pawnbroker which has been unlawfully obtained by either the pawnbroker or the pledgor and which is lawfully returned to its rightful owner, shall have the right to bring a civil action against the persons who illegally obtained the property.
(c) Every pawnbroker who sells any property received by him or her in pledge, before the time to redeem the same has expired shall make full restitution for value to the pledgor.
§47-25-8. Prohibition against unfair competition and other unfair, deceptive and fraudulent acts.

No provision of this article is to be construed to provide an exception from other laws of this state governing unfair competition and unfair, deceptive and fraudulent acts or practices, including the provisions of chapter forty-six-a of this code.
§47-25-9. Criminal penalties.
(a) Any person who engages in the business of operating a pawn shop in violation of this article is guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine not to exceed one thousand dollars.
(b) Every pawnbroker who sells any property received by him or her in pledge, before the time to redeem the same has expired, or continues to accept payment for property already sold, and every pawnbroker who willfully refuses to disclose the name of the purchaser and the price received for any article received in pledge and subsequently sold is guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine not to exceed two thousand dollars.
(c) Any pawnbroker who having received any property which has been embezzled or stolen, refuses or omits to exhibit the property upon demand during the usual business hours to any investigating law-enforcement officer is guilty of a felony and, upon conviction thereof, shall be imprisoned in the state penitentiary not to exceed five years, or by a fine not to exceed two thousand dollars, or both imprisoned and fined.
(d) Any person selling or pledging property to a pawnbroker who uses false or altered identification or a false declaration of ownership as related to the provisions set forth by this article, upon conviction thereof, is guilty of a misdemeanor and, upon conviction thereof, shall be confined in a county or regional jail, not more than one year, or fined not more than five hundred dollars, or both confined and fined.

NOTE: The purpose of this bill is to provide for the licensing and regulation of pawnbrokers.

This article is new; therefore, strike-throughs and underscoring have been omitted.