BILL NUMBER: SB 1685 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 22, 1998
AMENDED IN SENATE APRIL 15, 1998
AMENDED IN SENATE APRIL 2, 1998
INTRODUCED BY Senator Burton
FEBRUARY 17, 1998
An act to amend Sections 21051, 21201, and 21201.5 of, to
repeal Sections 21200.5 and 21200.7 of, and to repeal and add
Section 21200 of, the Financial Code, relating to pawnbrokers.
LEGISLATIVE COUNSEL'S DIGEST
SB 1685, as amended, Burton. Pawnbrokers: compensation.
Existing law provides generally that no pawnbroker shall charge or
receive compensation at a rate exceeding the amounts contained in a
specified schedule.
This bill would set up a 4-month 3-month
loan period and revise and recast the maximum amount of charges
and compensation , as specified that may be
imposed and collected by a pawnbroker during the 3-month loan period
or for monthly extensions thereof .
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 21051 of the Financial Code is amended to
read:
21051. (a) The limitations with respect to rates and charges set
forth in Sections 21200 and 21200.5 Section
21200 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.
SEC. 2. Section 21200 of the Financial Code is repealed.
SEC. 2.
SEC. 3. Section 21200 is added to the Financial Code, to
read:
21200. (a) Except as otherwise provided in this chapter, the
maximum amount a pawnbroker may charge for the four-month
three-month loan period and for each month that
the loan is extended as provided in Section 21201 shall not exceed
the following:
Charge for the four- Charge for
each
Loan amount month loan period month
extended
Under $ 20.00 $ 3 $ 1.00
$ 20 to 29.99 5 1.25
30 to 39.99 6 1.50
40 to 49.99 7 1.75
50 to 59.99 8 2.00
60 to 79.99 9 2.25
80 to 99.99 12 3.00
100 to 124.99 15 3.75
125 to 149.99 17 4.25
150 to 174.99 19 4.75
175 to 199.99 21 5.25
200 to 224.99 23 5.75
225 to 299.99 26 6.50
300 to 349.99 29 7.25
350 to 399.99 32 8.00
400 to 499.99 36 9.00
500 to 599.99 46 11.50
600 to 799.99 58 14.50
800 to 999.99 73 18.25
1,000 to 1,199.99 90 22.50
1,200 to 1,499.99 108 27.00
1,500 to 1,799.99 128 32.00
1,800 to 2,099.99 150 37.50
2,100 to 2,499.99 175 43.75
Charge for the three- Charge for
each
Loan amount month loan period month
extended
Under $ 20.00 $ 3.00 $ 1.00
$ 20 to 24.99 4.00 1.00
25 to 39.99 5.00 1.00
40 to 49.99 6.00 1.00
50 to 64.99 7.50 1.00
65 to 74.99 8.50 2.00
75 to 99.99 10.00 2.00
100 to 124.99 12.50 2.00
125 to 149.99 13.50 3.00
150 to 224.99 15.00 4.00
225 to 324.99 20.00 5.00
325 to 449.99 25.00 7.00
450 to 599.99 35.00 10.00
600 to 799.99 45.00 13.00
800 to 999.99 55.00 17.00
1,000 to 1,199.99 70.00 21.00
1,200 to 1,499.99 85.00 24.00
1,500 to 1,799.99 100.00 28.00
1,800 to 2,099.99 120.00 32.00
2,100 to 2,499.99 140.00 35.00
(b) One month's interest may be charged for any part of the month
in which pawned property is redeemed.
(c) A charge not exceeding one dollar ($1) for each month may be
charged on any loan when the monthly charge permitted by this section
would otherwise be less than one dollar ($1).
(d) The schedule of charges prescribed by this section shall be
posted in a place clearly visible to the general public.
SEC. 3.
SEC. 4. Section 21200.5 of the Financial Code is repealed.
SEC. 4.
SEC. 5. Section 21200.7 of the Financial Code is repealed.
SEC. 6. Section 21201 of the Financial Code is amended to read:
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
three-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 bold face 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
three 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
three months. During such period the borrower may redeem
the articles upon payment of the amount of the loan and the
applicable charges.
If any pledged article is not redeemed during the
four-month three-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 either by registered mail, or
by certified mail, or by regular mail for which a certificate of
mailing is issued by the United States Postal Service addressed to
his or her last known address of the termination of the loan period,
and extending the right of redemption , during posted business
hours, for a period of 10 days from date of mailing of such
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.
SEC. 7. Section 21201.5 of the Financial Code is amended to read:
21201.5. (a) 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 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 minimum fees 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.
(b) Any time a loan is rewritten as provided in subdivision (a)
three times in succession following the original loan, no loan
origination fee or storage fee shall be charged for the fourth loan
period.