Senate Bill No. 423

(By Senator Snyder)

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[Introduced February 8, 2000; referred to the Committee on the Judiciary; and then to the Committee on Finance.]
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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; definitions; providing that the secretary of state has authority to promulgate registration application for pawnbrokers; establishing license requirements and fees for pawnbrokers; creating requirements for pawn tickets; requiring pawn transaction reporting; establishing disclosure requirements for pawn transactions; limitations on pawn agreements and practices; providing for restitution to pawnbrokers and buyers of property unlawfully obtained; prohibiting unfair trade practices; and establishing criminal penalties for violations of licensing requirements, 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:
ARTICLE 25. PAWNBROKERS.
§47-25-1. Definitions.
(a) "Pawnbroker" means any person, partnership, association or corporation advancing money in a pawn transaction in exchange for collateral in the property of the pledgor.
(b) "Pawn transaction" means 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 by a pledgor as security for money or other consideration in a pawn transaction.
(d) "Pledgor" means a person who delivers the pledge into the possession of a pawnbroker, unless such person discloses that he or she is acting on behalf of another, and in such an event "pledgor" means the disclosed principal.
§47-25-2. Registration requirements for pawnbrokers with the secretary of state.
(a) After the first day of July, two thousand, persons engaged in business as a pawnbroker shall comply with the provisions of this article and shall register with the secretary of state.
(b) The secretary of state shall promulgate a registration application for all pawnbrokers by the first day of May, two thousand, so that registration applications may be applied for and processed by the first day of July, two thousand.
(c) Upon receipt of a registration application, upon verification that the person is a resident of the state, is at least eighteen years of age and has adequate insurance coverage as required by section three of this article, and upon receiving a registration fee not to exceed one hundred dollars, the secretary of state shall issue a two-year registration to the person to do business in this state as a pawnbroker. Separate applications and licenses are required for each place of business of a pawnbroker, and such registration certificate shall contain the pawnbroker's business address and date of expiration. 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.
(d) Only licensed pawnbrokers may;
(1) Display any sign or other device in or about a place of business, or use any advertising or printing material that resembles an emblem or sign commonly used by pawnbrokers;
(2) Display any sign or other device in or about a place of business or use any advertising or printing material indicating that pawnbroker transactions take place at the business; and
(3) Represent to the public that he or she is a pawnbroker or use the word "pawnbroker" either through advertising, soliciting, signs or otherwise.
§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) All pawnbrokers are required to have an adequate fund or insurance to cover the pledge value of all pledged property in the control of the pawnbroker in the event of loss by fire, theft, burglary or otherwise: Provided, That such insurance coverage be in an amount not less than thirty thousand dollars.
(c) All pawnbrokers shall continuously display their business hours on the exterior front door of their place of business or on another conspicuous location that is clearly visible to the public. Their registration certificate shall also be prominently placed in a location that is clearly visible to the public.
(d) Items bought outright shall be held for seven days before being disposed of or sold and shall be subject to the reporting requirements of sections four and five of this article: Provided, That items on invoice from a manufacturer or wholesaler with an established place of business are exempt from the provisions of this subsection.
(e) All pawnbrokers shall obtain verification 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 verification of ownership shall appear on the bill of sale or pawn ticket that is completed by the seller or pledgor at the time of the transaction.
(f) All pawnbrokers and their employees or agents shall admit the chief law-enforcement officer, or his or her authorized agent with the approval of the chief, of the jurisdiction where the business is located or any law-enforcement officer of the state or federal government during the pawnbroker's posted, regular business hours. The pawnbroker shall permit the officer to examine all records, including pawn tickets and pawn transaction forms, required by this article and any article listed in a record that is believed by the officer to be missing or stolen.
§47-25-4. Requirements for pawn tickets.
(a) Every pawnbroker shall keep at his or her place of business an accurate and legible record of all pawn tickets written by the pawnbroker for the previous three years. A pawn ticket shall be written in ink or by another permanent recordation method of each transaction made in the course of his or her business. The pawn ticket shall be made at the time of the transaction and shall include at a minimum:
(1) A description of the make, manufacturer, model, model number, size, shape, serial number, year of manufacture or other description 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, together with a personal description, including the height, weight, date of birth, social security number, hair, and eye color of such person or persons;
(5) Verification of the identity of the person by the pawnbroker by examining the state-issued identification card, driver's license or federal passport other government-issued photo identification card of the person and noting the identification exhibited, the issuing agency, and the number thereon with a copy thereof being kept by the pawnbroker;
(6) The maturity date, amount financed, finance charge, total payments, annual percentage rate, payment schedule and prepayment terms;
(7) The signature of the pledgor upon placing the pledge and upon redeeming the pledge; and
(8) A statement that complies with the federal Truth in Lending Act, 15 U.S.C.§1601 et seq., as amended, containing, at a minimum, the following information:
The pledged merchandise listed has been honestly acquired and is clear of all encumbrances. I hereby pledge complete title to this merchandise to lender for the sum of the amount financed, the receipt of which is hereby acknowledged, and I agree to warrant and defend the title. I agree that I am indebted to lender for the sum, plus finance charges. In the event the total of payments is not paid on the due date, or my loan renewed by payment of the monthly charge, lender shall become vested with all right, title and interest of myself and/or my assigns to such merchandise to hold and dispose of as its own property, without any notice to, or demands from me.
(b) In addition to the information required in subsection (a) of this section, a description of firearms including the color, caliber and size of the firearms.
§47-25-5. Required transaction reporting on a pawn transaction form.

(a) Every pawnbroker shall each day prepare a report on a pawn transaction form of all the transactions conducted by the pawnbroker for that day.
(b) The pawn transaction form shall include all the information required by subdivisions (1), (2), (3), (4) and (5), subsection (a), section four of this article.
(c) The pawn transaction form shall be made available to law-enforcement officers pursuant to section three of this article.
§47-25-6. Pawnbroker disclosure requirements for pawn transactions.
(a) Upon receipt of any pawned property, the pawnbroker shall deliver to the pledgor a copy of the completed pawn ticket required by section four of this article.
(b) Nothing appearing on a pawn ticket shall relieve the pawnbroker of the obligation to exercise reasonable care while in control of and exerting custody over property pledged pursuant to this article.
(c) No additional terms or conditions may be imposed upon the pledgor for redemption of property that are not disclosed on the pledge ticket.
(d) A written receipt shall be maintained by the pawnbroker and provided to the pledgor for any moneys paid in payment or redemption of pawned property.
§47-25-7. Limitation on agreements and practices.
(a) Notwithstanding that a pawn transaction subject to this article creates a debtor/creditor relationship between the parties, a pawnbroker may not make any agreement requiring the pledgor to personally guarantee a loan in connection with a pawn transaction. Only property in the possession of the pawnbroker may serve as collateral for a pawn transaction.
(b) No pledgor has an obligation to redeem pledged goods or make any payment on a pawn transaction. Except as otherwise provided in this article and under law, the only recourse of a pawnbroker has against a pledgor is to take full control and ownership over the property pledged by the pledgor.
(c) Any pledged property not redeemed within thirty days following the last fixed maturity date may be forfeited and become the property of the pawnbroker at his or her option.
(d) A pawnbroker may not:
(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 required by this article; or
(5) Purchase or take any article in pawn or pledge from any person appearing to be intoxicated or under the influence of any drug.
(e) No property pledged to any pawnbroker may be disfigured or its identity destroyed or affected in any manner while under the control of the pawnbroker nor may any property be concealed for forty-eight hours after the property is received by the pawnbroker.
(f) Except as otherwise provided by this article, any person properly identifying him or herself as the original pledgor in the pawn transaction, or upon written evidence of assignment thereof, who presents a pawn ticket to the pawnbroker shall be presumed to be entitled to redeem the pledged property described on the pawn ticker.
(g) Every pawnbroker who sells any pledged property before the time to redeem the property has expired shall make full restitution for the value of the property 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 a state or of the United States governing unfair competition and unfair, deceptive and fraudulent acts or practices, including the provisions of chapter forty-six-a of this code and of the federal Truth in Lending Act.
§47-25-9. Criminal penalties.
(a) Any person who violates the provisions of this article is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than two thousand dollars.
(b) Every pawnbroker who sells any pledged property before the maturity date or continues to accept payment for property already sold is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than two thousand dollars.
(c) 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 fined not more than two thousand dollars.
(d) Every pawnbroker who refuses or omits to exhibit property upon the demand of an investigating law-enforcement officer as provided by this article is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than two thousand dollars.
(e) Any person selling or pledging property to a pawnbroker using false or altered identification or verification of ownership is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than two thousand dollars.


NOTE: The purpose of this bill is to license and otherwise regulate pawnbrokers.


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