SB 285, as amended, Block. Pawnbrokers: compensation: loans.
Existing law regulates pawnbrokers and sets the maximum compensation charged or received by pawnbrokers on loans to their customers. A knowing violation of the provisions regulating pawnbrokers is a crime.
Existing law provides a schedule of maximum charges for 21 loan brackets for the first 3 months of any loan.
This bill, in that schedule, would consolidate the 21 loan brackets into 6 and set maximum charges within those brackets.
Existing law, among other things, limits the charge for the 4th and subsequent months of a loan to 2.5% per month on the unpaid balance, as specified.
This bill would increase the charge limit for the 4th and subsequent months to 3% per month.
Existing law permits a loan setup fee of the greater of $5 or 2% of the loan amount, not to exceed $10.
This bill would adjust the permitted loan setup fee to the greater of either $5 or 3% of the loan amount, not to exceed $30.
begin deleteExisting law permits a pawnbroker to collect a handling and storage charge for certain pawned articles at the time property is redeemed. end deleteExisting law establishes the maximum amount, irrespective of the duration of the loan, that may be charged based on size of pawned articles, as specified, and prohibits a storage charge for any article that can be contained within one cubic foot.
begin deleteThis bill would instead provide that a pawnbroker may include the handling and storage charge when the pawnbroker issues a loan or any subsequent loan, as specified. end deleteThis
bill would permit a pawnbroker to additionally charge a maximum of $1 for handling and storage of any article that can be contained within one cubic foot.
Existing law requires a pawnbroker to 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 provides for extending the right of redemption for a period of 10 days from the date that notice is mailed.
This bill would instead require the pawnbroker to provide that notification to the pledgor at his or her last known mailing or electronic address, by a means for which verification of mailing or, at the sole option of the pledgor, electronic transmission of the notification can be provided by the pawnbroker, as specified.
Because a knowing violation of these provisions by a pawnbroker would be a crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 21200 of the Financial Code is amended
2to read:
(a) Except as otherwise provided in this chapter, no
4pawnbroker shall charge or receive compensation at a rate
5exceeding the sum of the following:
P3 1(1) Three percent per month on the unpaid principal balance of
2any loan.
3(2) A charge not exceeding three dollars ($3) a month on any
4loan when the monthly charge permitted by paragraph (1) would
5otherwise be less.
6(b) One month’s interest may be charged for any part of the
7month in which pawned property is redeemed.
Section 21200.1 of the Financial Code is amended to
9read:
A loan setup fee of five dollars ($5) or 3 percent,
11whichever is greater, may be charged for each loan. However, the
12maximum loan setup fee shall not exceed thirty dollars ($30). Loan
13setup fees are in addition to any other allowed charges.
Section 21200.5 of the Financial Code is amended to
15read:
A pawnbroker may charge as prescribed in the
17following schedule:
19Schedule of Charges
21(a) A charge not exceeding three dollars ($3) may be made on
22any loan for not more than three months which does not exceed
23nineteen dollars and ninety-nine cents
($19.99).
24(b) A charge not exceeding six dollars ($6) may be made on
25any loan for not more than three months of twenty dollars ($20)
26or more, but not exceeding forty-nine dollars and ninety-nine cents
27($49.99).
28(c) A charge not exceeding nine dollars ($9) may be made on
29any loan for not more than three months of fifty dollars ($50) or
30more, but not exceeding seventy-four dollars and ninety-nine cents
31
($74.99).
32(d) A charge not exceeding twelve dollars ($12) may be made
33on any loan for not more than three months of seventy-five dollars
34($75) or more, but not exceeding ninety-nine dollars and
35ninety-nine cents
($99.99).
36(e) A charge not exceeding fifteen dollars ($15) may be made
37on any loan for not more than three months of one hundred dollars
38($100) or more, but not exceeding one hundred seventy-four dollars
39and ninety-nine cents ($174.99).
P4 1(f) A charge not exceeding 9 percent may be made on any loan
2for not more than three months on any loan of one hundred
3seventy-five dollars ($175) or more, but not exceeding two
4thousand four hundred ninety-nine dollars and ninety-nine cents
5($2,499.99).
6(g) The monthly charge for any extension of a written contract
7required by Section 21201 or 21201.5 shall be computed in
8accordance with the provisions of Section 21200.
9(h) The schedule of charges prescribed by this section shall be
10posted in a place clearly visible to the general public.
Section 21200.6 of the Financial Code is amended to
12read:
(a) In addition to other allowed charges,begin delete when a
14pawnbroker issues a loan or any subsequent loan as permitted by
15Section 21201.5, the pawnbroker may include a handling and
16storage charge for
pawned articles.end delete
17redeemed, a pawnbroker may collect a handling and storage
18charge for pawned articles.end insert
For any loan issued pursuant to Section
1921201 or subsequent loan issued pursuant to Section 21201.5, the
20maximum amount that may be charged pursuant to this section is
21in accordance with the following schedule:
22(1) One dollar ($1) for any article that can be contained within
23one cubic foot.
24(2) Five dollars ($5) for any article that cannot be contained
25within one cubic foot but can be contained within three cubic feet.
26(3) Ten dollars ($10) for any article that cannot be contained
27within three cubic feet but can be contained within six cubic feet.
28(4) Twenty dollars ($20) for any article that cannot be contained
29within six cubic feet and one
dollar ($1) for each additional cubic
30foot in excess of six cubic feet.
31(b) For purposes of this section, cubic feet shall be determined
32by multiplying the width of an article, at its greatest width, by the
33depth of an article, at its greatest depth, by the height of an article,
34at its greatest height.
Section 21201 of the Financial Code is amended to
36read:
(a) Every loan made by a pawnbroker for which goods
38are received in pledge as security shall be evidenced by a written
39contract, a copy of which shall be furnished to the pledgor. The
40loan contract shall provide a four-month loan period, shall set forth
P5 1the loan period and the date on which the loan is due and payable,
2and shall clearly inform the pledgor of his or her right to redeem
3the pledge during the loan period.
4(b) Every loan contract shall contain the following notice, in at
5least 8-point boldface type and circumscribed by a box,
6immediately above the space for the pledgor’s signature:
7“You may redeem the property you
have pledged at any time
8
until the close of business on ____ [fill in date four months from
9date loan begins]. To redeem, you must pay the amount of the loan
10and the applicable charges which have accrued through the date
11on which you redeem.”
12(c) Every pawnbroker shall retain in his or her possession every
13article pledged to him or her for a period of four months. During
14such period the pledgor may redeem the articles upon payment of
15the amount of the loan and the applicable charges. If the pledgor
16and the pawnbroker agree in writing that the pawned property may
17be stored off premises, following the request for redemption of
18the loan, the pawnbroker shall return the pledged property to the
19pledgor the next calendar day when both the pawnbroker’s store
20and the storage facility are open, not to exceed two business days.
21(d) If any pledged article is not redeemed during the four-month
22loan period as provided herein, and the pledgor and pawnbroker
23do not mutually agree in writing to extend the loan period, the
24pawnbroker shall notify the pledgor within one month after
25expiration of the loan period. If the pawnbroker fails to notify the
26pledgor within one month after the expiration of the loan period,
27the pawnbroker shall not charge interest from the day after the
28expiration of the one-month period. The pawnbroker shall notify
29the pledgor at his or her last known mailing or electronic address
30of the termination of the loan period, by a means for which
31verification of mailing or, at the sole option of the pledgor,
32electronic transmission of the notification can be provided by the
33pawnbroker, and extending the right of redemption, during posted
34business hours,
for a period of 10 days from date of mailing or
35electronic transmission of that notice.begin insert Electronic notice of the
36termination of the loan period shall be valid if the pledgor has
37previously responded to an electronic communication sent by the
38pawnbroker to the pledgor’s last known electronic address
39provided by the pledgor. Upon the initiation of each new or
40replacement loan, the pledgor shall affirm that the current
P6 1electronic address on file with the pawnbroker is valid.end insert The 10-day
2notice shall
state, in substantially the same format as the following:
3“If the tenth day falls on a day when the pawnshop is closed, the
4time period is extended to the next day that the pawnshop is open.”
5(e) The posted schedule of charges required pursuant to Section
621200.5 shall contain a notice informing the pledgor that if he or
7she desires, the pawnbroker shall send the notice of termination
8of the loan period by registered or certified mail with return receipt
9requested, upon prepayment of the mailing costs.
10(f) If any pledged article is not redeemed within the 10-day
11notice period, the pawnbroker shall become vested with all right,
12title, and interest of the pledgor, or his or her assigns, to the pledged
13article, to hold and dispose of as his or her own property. Any
14other
provision of law relating to the foreclosure and sale of
15pledges shall not be applicable to any pledge the title to which is
16transferred in accordance with this section. The pawnbroker shall
17not sell any article of pledged property until he or she has become
18vested with the title to that property pursuant to this section.
19(g) The sale of pledged property is a misdemeanor pursuant to
20Section 21209.
Section 21201.2 of the Financial Code is amended to
22read:
If the pledgor fails to redeem any pawned item during
24the loan period, thereby obliging the pawnbroker to mail or
25electronically transmit the notice required under Section 21201,
26the pawnbroker may charge a fee of up to three dollars ($3) for
27services and costs pertaining to the preparation of the notice, in
28addition to any other allowed charges.
No reimbursement is required by this act pursuant to
30Section 6 of Article XIII B of the California Constitution because
31the only costs that may be incurred by a local agency or school
32district will be incurred because this act creates a new crime or
33infraction, eliminates a crime or infraction, or changes the penalty
34for a crime or infraction, within the meaning of Section 17556 of
35the Government Code, or changes the definition of a crime within
36the meaning of Section 6 of Article XIII B of the California
37Constitution.
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