Senate Bill No. 203

(By Senators Snyder, Fanning, Oliverio and Hunter)

____________

[Introduced February 21, 2001.];

referred to the Committee on the Judiciary.]




A BILL to amend section one hundred five, article one, chapter forty-six-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to amend chapter forty- seven of said code by adding thereto a new article, designated article twenty-five, all relating to the licensing and regulation of pawnbrokers; definitions; providing that the commissioner of banking has authority to promulgate license 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; authorizing the commissioner of banking to issue, deny, revoke or suspend pawnbroker licenses; authorizing the commissioner of banking to promulgate forms and propose necessary legislative rules; creating 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 receiving, 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 section one hundred five, article one; chapter forty-six- a of the code of West Virginia, one thousand nine hundred thirty- one, as amended, be amended; and that chapter forty-seven of said code be amended by adding thereto a new article, designated article twenty-five, to read as follows:

CHAPTER 46A. WEST VIRGINIA CONSUMER CARD AND PROTECTION ACT

ARTICLE 1. SHORT TITLE, DEFINITIONS AND GENERAL PROVISIONS.

§46A-1-105. Exclusions.

(a) This chapter does not apply to:

(1) Extensions of credit to government or governmental agencies or instrumentalities;

(2) The sale of insurance by an insurer, except as otherwise provided in this chapter; or

(3) Transactions under public utility or common carrier
tariffs if a subdivision or agency of this state or of the United States regulates the charges for the services involved, the charges for delayed payment, and any discount allowed for early payment;
or.

(4) Licensed pawnbrokers.

(b) Secondary mortgage lender and broker licensees are excluded from the provisions of this chapter to the extent those provisions directly conflict with any section of article seventeen, chapter thirty-one of this code.

CHAPTER 47. REGULATION OF TRADE.

ARTICLE 25. PAWNBROKERS.

§47-25-1. Definitions.

(a) "Commissioner" means the commissioner of banking.

(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. Pawnbroker licensing.

(a) After the first day of July, two thousand one, persons engaged in business as a pawnbroker shall comply with the provisions of this article and shall be licensed by the commissioner of banking. In order to allow reasonable transition time for licensing of pawnbrokers, persons engaged in pawnbroker activities must file an application for licensure with the commissioner by the first day of August, two thousand one, and will be permitted to operate as a pawnbroker until either the license is issued or denied by the commissioner of banking or until the first day of October, two thousand one.

(b) The commissioner shall promulgate a license application
for all pawnbrokers by the first day of May, two thousand one, so that applications may be applied for and processed by the first day of July, two thousand one.
(c) Upon receipt of a license application, upon verification that the person is at least eighteen years of age, has adequate insurance coverage or assets as required by section three of this article, has not been convicted of a felony in the past ten years, and upon receiving a license fee of one hundred dollars, the commissioner shall issue a two-year license 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 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 ninety days, 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 liquid assets 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 license 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 six and seven 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 a statement affirming 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. A statement affirming 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 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 property listed in a record that is believed by the officer to be missing or stolen.

§47-25-4. Powers and duties of the banking commissioner.

(a) Upon notice to a licensee or applicant and after providing a reasonable opportunity to be heard, the commissioner may refuse
to issue, reissue, or may suspend or revoke any license upon a finding by the commissioner that the licensee or applicant has or will violate a licensing requirement of this article if a licence is issued or retained.
(b) The commissioner shall prescribe and publish all forms as may be necessary, and may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty- nine-a of this code as needed, to effectuate the provisions of this article.

§47-25-5. 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 manufacturer, make model and serial number of the firearms.

§47-25-6. 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 section five of this article.
(c) The pawn transaction form shall be made available to law-enforcement officers pursuant to section three of this article.
§47-25-7. 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 five 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.
§47-25-8. Restitution to buyer and pawnbroker.
(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 person who illegally obtained the property.
(c) 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.
§47-25-9. 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 fifteen 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.
(6) Purchase or take any article in pawn or pledge where the property has had its serial number removed, damaged or otherwise altered.
(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.
§47-25-10. 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.
§47-25-11. County and municipal regulation of pawnbrokers.
No provision of this article is to be construed to prohibit or otherwise limit any county or municipality of this state from adopting an ordinance, to the extent that the ordinance does not conflict or create lesser requirements than this article or any other provision of this code, establishing additional requirements of pawnbrokers within its jurisdiction. All Pawnshops located in a county or municipality in which an ordinance establishes reporting requirements to local law enforcement officials are not required to provide duplicate information to other law enforcement officials pursuant to section three of this article. Licenses Issued by the commissioner are required of every pawnshop location regardless of local licensing requirements is required to obtain a license and comply with all the commissioner's licensing requirements.
§47-25-12. Criminal penalties.
(a) Any person who engages in the business of operating a pawn shop in violation of this article shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine not in excess of one thousand dollars.
(b) Every pawnbroker who sells any property received by him 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, upon conviction is guilty of a misdemeanor, and shall be punished a fine not to exceed two thousand dollars. (c) Any pawnbroker who knowingly receives any property which has been embezzled or stolen, refuses or omits to exhibit said property upon demand during the usual business hours to any investigating law enforcement officer, upon conviction thereof, is guilty of a felony and shall be punished by imprisonment in jail or the state penitentiary not to exceed five years or in the county jail not to exceed one year, or by a fine not to exceed two thousand dollars, or both.
(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 act, and upon conviction thereof, shall be guilty of a misdemeanor, and shall be punished by confinement in a county or regional jail, not more than one year, or fined not more than five hundred dollars, or both.

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


Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

46A-1 through 12 are new; therefore, strike-throughs and underscoring have been omitted.

This bill was recommended for passage by the Joint Standing Committee on the Judiciary.