Bill Text: CA SB285 | 2015-2016 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Pawnbrokers: compensation: loans.

Spectrum: Slight Partisan Bill (Democrat 3-1)

Status: (Passed) 2015-09-02 - Chaptered by Secretary of State. Chapter 245, Statutes of 2015. [SB285 Detail]

Download: California-2015-SB285-Introduced.html

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BILL NUMBER: SB 285	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Block
   (Coauthors: Senators Galgiani and Vidak)
   (Coauthor: Assembly Member Maienschein)

                        FEBRUARY 19, 2015

   An act to amend Sections 21200, 21200.1, 21200.5, 21200.6, 21201,
and 21201.2 of the Financial Code, relating to pawnbrokers.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 285, as introduced, 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.
   Existing law permits a pawnbroker to collect a handling and
storage charge for certain pawned articles at the time property is
redeemed. Existing 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.
   This 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. This 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 1.  Section 21200 of the Financial Code is amended to read:

   21200.  (a) Except as otherwise provided in this chapter, no
pawnbroker shall charge or receive compensation at a rate exceeding
the sum of the following:
   (1)  Two and one-half   Three  percent
per month on the unpaid principal balance of any loan.
   (2) A charge not exceeding three dollars ($3) a month on any loan
when the monthly charge permitted by paragraph (1) would otherwise be
less.
   (b) One month's interest may be charged for any part of the month
in which pawned property is redeemed.
  SEC. 2.  Section 21200.1 of the Financial Code is amended to read:
   21200.1.  A loan setup fee  not to exceed  
of  five dollars ($5) or  2   3 
percent, whichever is greater, may be charged for each loan. However,
the maximum loan setup fee shall not exceed  ten dollars
($10)  thirty dollars ($30)  . Loan setup fees are
in addition to any other allowed charges.
  SEC. 3.  Section 21200.5 of the Financial Code is amended to read:
   21200.5.  A pawnbroker may charge as prescribed in the following
schedule:


   Schedule of Charges


   (a) A charge not exceeding  one dollar ($1) per month for
the first three months may be made on any loan   three
dollars ($3) may be made on any loan for not more than three months
 which does not exceed  fourteen   nineteen
 dollars and ninety-nine cents  ($14. 99) 
 ($19.99)  .
   (b) A charge not exceeding  three dollars ($3) 
 six dollars ($6)  may be made on any loan for not more than
three months of  fifteen dollars ($15)   twenty
dollars ($20)  or more, but not exceeding  nineteen
  forty-nine  dollars and ninety-nine cents
 ($19.99)     ($49.99)  .
   (c) A charge not exceeding  four dollars ($4) 
 nine dollars ($9)  may be made on any loan for not more
than three months of  twenty dollars ($20)  
fifty dollars ($50)  or more, but not exceeding 
twenty-four   seventy-four  dollars and ninety-nine
cents  ($24.99)   ($74.99)  .
   (d) A charge not exceeding  five dollars ($5) 
 twelve dollars ($12)  may be made on any loan for not more
than three months of  twenty-five dollars ($25) 
 seventy-five dollars ($75)  or more, but not exceeding
 thirty-nine  ninety-nine  dollars and
ninety-nine cents  ($39.99)   ($99.99)  .
   (e) A charge not exceeding  six dollars ($6) 
 fifteen dollars ($15)  may be made on any loan for not more
than three months of  forty dollars ($40)   one
hundred dollars ($100)  or more, but not exceeding 
forty-nine   one hundred seventy-four  dollars and
ninety-nine cents  ($49.99)   ($174.99)  .
   (f) A charge not exceeding  seven dollars and fifty cents
($7.50)   9   percent  may be made on any
loan for not more than three months on any loan of  fifty
dollars ($50)   one hundred seventy-five dollars ($175)
 or more, but not exceeding  sixty-four  
two   thousand four hundred ninety-nine  dollars and
ninety-nine cents  ($64.99)   ($2,499.99) 
. 
   (g) A charge not exceeding eight dollars and fifty cents ($8.50)
may be made on any loan for not more than three months of sixty-five
dollars ($65) or more, but not exceeding seventy-four dollars and
ninety-nine cents ($74.99).  
   (h) A charge not exceeding ten dollars ($10) may be made on any
loan for not more than three months of seventy-five dollars ($75) or
more, but not exceeding ninety-nine dollars and ninety-nine cents
($99.99).  
   (i) A charge not exceeding twelve dollars and fifty cents ($12.50)
may be made on any loan for not more than three months of one
hundred dollars ($100) or more, but not exceeding one hundred
twenty-four dollars and ninety-nine cents ($124.99). 

   (j) A charge not exceeding thirteen dollars and fifty cents
($13.50) may be made on any loan for not more than three months of
one hundred twenty-five dollars ($125) or more, but not exceeding one
hundred forty-nine dollars and ninety-nine cents ($149.99).
 
   (k) A charge not exceeding fifteen dollars ($15) may be made on
any loan for not more than three months of one hundred fifty dollars
($150) or more, but not exceeding two hundred twenty-four dollars and
ninety-nine cents ($224.99).  
   (l) A charge not exceeding twenty dollars ($20) may be made on any
loan for not more than three months of two hundred twenty-five
dollars ($225) or more, but not exceeding three hundred twenty-four
dollars and ninety-nine cents ($324.99).  
   (m) A charge not exceeding twenty-five dollars ($25) may be made
on any loan for not more than three months of three hundred
twenty-five dollars ($325) or more, but not exceeding four hundred
forty-nine dollars and ninety-nine cents ($449.99). 

   (n) A charge not exceeding thirty-five dollars ($35) may be made
on any loan for not more than three months of four hundred fifty
dollars ($450) or more, but not exceeding five hundred ninety-nine
dollars and ninety-nine cents ($599.99).  
   (o) A charge not exceeding forty-five dollars ($45) may be made on
any loan for not more than three months of six hundred dollars
($600) or more, but not exceeding seven hundred ninety-nine dollars
and ninety-nine cents ($799.99).  
   (p) A charge not exceeding fifty-five dollars ($55) may be made on
any loan for not more than three months of eight hundred dollars
($800) or more, but not exceeding nine hundred ninety-nine dollars
and ninety-nine cents ($999.99).  
   (q) A charge not exceeding seventy dollars ($70) may be made in
any loan for not more than three months of one thousand dollars
($1,000) or more, but not exceeding eleven hundred ninety-nine
dollars and ninety-nine cents ($1,199.99).  
   (r) A charge not exceeding eighty-five dollars ($85) may be made
on any loan for not more than three months of twelve hundred dollars
($1,200) or more, but not exceeding fourteen hundred ninety-nine
dollars and ninety-nine cents ($1,499.99).  
   (s) A charge not exceeding one hundred dollars ($100) may be made
on any loan for not more than three months of fifteen hundred dollars
($1,500) or more, but not exceeding seventeen hundred ninety-nine
dollars and ninety-nine cents ($1,799.99).  
   (t) A charge not exceeding one hundred twenty dollars ($120) may
be made on any loan for not more than three months of eighteen
hundred dollars ($1,800) or more, but not exceeding two thousand
ninety-nine dollars and ninety-nine cents ($2,099.99). 

   (u) A charge not exceeding one hundred forty dollars ($140) may be
made on any loan for not more than three months of twenty-one
hundred dollars ($2,100) or more, but not exceeding twenty-four
hundred ninety-nine dollars and ninety-nine cents ($2,499.99).
 
   (v) 
    (g)  The monthly charge for any extension of a written
contract required by Section 21201 or 21201.5 shall be computed in
accordance with the provisions of Section 21200. 
   The 
    (h)     The  schedule of charges
prescribed by this section shall be posted in a place clearly visible
to the general public.
  SEC. 4.  Section 21200.6 of the Financial Code is amended to read:
   21200.6.  (a) In addition to other allowed charges,  at
the time property is redeemed   when  a pawnbroker
 issues a loan or any subsequent loan as permitted by Section
21201.5, the pawnbroker  may  collect  
include  a handling and storage charge for  certain
 pawned articles.  Irrespective of the duration of
the loan,   For any loan issued pursuant to Section
21201 or subsequent loan issued pursuant to Section 21201.5, 
the maximum amount that may be charged pursuant to this section is in
accordance with the following schedule: 
   (1) One dollar ($1) for any article that can be contained within
one cubic foot.  
   (1) 
    (2)  Five dollars ($5) for any article that cannot be
contained within one cubic foot  but can be cont   ained
within three cubic feet  . 
   (2) 
    (3)  Ten dollars ($10) for any article that cannot be
contained within three cubic feet  but can be contained within
six cubic feet  . 
   (3) 
    (4)  Twenty dollars ($20) for any article that cannot be
contained within six cubic feet and one dollar ($1) for each
additional cubic foot in excess of six cubic feet. 
   (b) No storage charge is allowed for any article that can be
contained within one cubic foot.  
   (c) 
    (b)  For purposes of this section, cubic feet shall be
determined by multiplying the width of an article, at its greatest
width, by the depth of an article, at its greatest depth, by the
height of an article, at its greatest height.
  SEC. 5.  Section 21201 of the Financial Code is amended to read:
   21201.   (a)    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   pledgor  . The loan contract
shall provide a four-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   pledgor  of
his or her right to redeem the pledge during the loan period.

   Every 
    (b)     Every  loan contract shall
contain the following notice, in at least 8-point boldface type and
circumscribed by a box, immediately above the space for the 
borrower's   pledgor's  signature:

   "You may redeem the property you have pledged at any time until
the close of business on ____  fill in date four 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 
    (c)     Every  pawnbroker shall retain
in his or her possession every article pledged to him or her for a
period of four months. During such period the  borrower
  pledgor  may redeem the articles upon payment of
the amount of the loan and the applicable charges. If the 
borrower   pledgor  and the pawnbroker agree in
writing that the pawned property may be stored off premises,
following the request for redemption of the loan, the pawnbroker
shall return the pledged property to the  consumer 
 pledgor  the next calendar day when both the pawnbroker's
store and the storage facility are open, not to exceed two business
days. 
   If 
    (d)     If  any pledged article is not
redeemed during the four-month loan period as provided herein, and
the  borrower   pledgor  and pawnbroker do
not mutually agree in writing to extend the loan period, the
pawnbroker shall notify the  borrower   pledgor
 within one month after expiration of the loan period. If the
pawnbroker fails to notify the  borrower  
pledgor  within one month after the expiration of the loan
period, the pawnbroker shall not charge interest from the day after
the expiration of the one-month period. The pawnbroker shall notify
the  borrower   pledgor  at his or her last
known  mailing or electronic  address of the termination of
the loan period, by a means for which verification of mailing
 or delivery   or, at the sole option of the
pledg   or, electronic transmission  of the
notification can be provided by the pawnbroker, and extending the
right of redemption, during posted business hours, for a period of 10
days from date of mailing  or electronic transmission  of
that notice. The 10-day notice shall  include a statement
that:   state, in substantially the same format as the
following:  "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 
    (e)     The  posted schedule of
charges required pursuant to Section 21200.5 shall contain a notice
informing the  borrower   pledgor  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 
    (f)     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 
    (g)     The  sale of pledged property
is a misdemeanor pursuant to Section 21209.
  SEC. 6.  Section 21201.2 of the Financial Code is amended to read:
   21201.2.  If the pledgor fails to redeem any pawned item during
the loan period, thereby obliging the pawnbroker to mail  or
electronically transmit  the notice required under Section
21201, the pawnbroker may charge a fee of up to three dollars ($3)
for services and costs pertaining to the preparation of the notice,
in addition to any other allowed charges.
  SEC. 7.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.