Bill Text: CA SB285 | 2015-2016 | Regular Session | Chaptered
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-Chaptered.html
BILL NUMBER: SB 285 CHAPTERED
BILL TEXT
CHAPTER 245
FILED WITH SECRETARY OF STATE SEPTEMBER 2, 2015
APPROVED BY GOVERNOR SEPTEMBER 2, 2015
PASSED THE SENATE AUGUST 20, 2015
PASSED THE ASSEMBLY JULY 16, 2015
AMENDED IN ASSEMBLY JUNE 4, 2015
AMENDED IN SENATE MAY 5, 2015
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, and to add Section 21205 to, the Financial Code,
relating to pawnbrokers.
LEGISLATIVE COUNSEL'S DIGEST
SB 285, 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 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 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 written contract that provides a 4-month
loan period for every loan made by a pawnbroker for which goods are
received in pledge as security and, under specified circumstances,
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 instead would require a minimum 4-month loan period and
would 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.
This bill also would require representatives of the pawnbroker
industry to poll their members annually to gather data relating to
the current financial condition of the California pawn industry.
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.
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) 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 of five dollars ($5) or 3 percent,
whichever is greater, may be charged for each loan. However, the
maximum loan setup fee shall not exceed 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 three dollars ($3) may be made on any
loan for not more than three months which does not exceed nineteen
dollars and ninety-nine cents ($19.99).
(b) A charge not exceeding six dollars ($6) may be made on any
loan for not more than three months of twenty dollars ($20) or more,
but not exceeding forty-nine dollars and ninety-nine cents ($49.99).
(c) A charge not exceeding nine dollars ($9) may be made on any
loan for not more than three months of fifty dollars ($50) or more,
but not exceeding seventy-four dollars and ninety-nine cents
($74.99).
(d) A charge not exceeding twelve dollars ($12) 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).
(e) A charge not exceeding fifteen dollars ($15) may be made on
any loan for not more than three months of one hundred dollars ($100)
or more, but not exceeding one hundred seventy-four dollars and
ninety-nine cents ($174.99).
(f) A charge not exceeding 9 percent may be made on any loan for
not more than three months on any loan of one hundred seventy-five
dollars ($175) or more, but not exceeding two thousand four hundred
ninety-nine dollars and ninety-nine cents ($2,499.99).
(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.
(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 or a replacement loan is issued pursuant to
Section 21201.5, the pawnbroker may collect a handling and storage
charge for pawned articles. 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.
(2) Five dollars ($5) for any article that cannot be contained
within one cubic foot but can be contained within three cubic feet.
(3) Ten dollars ($10) for any article that cannot be contained
within three cubic feet but can be contained within six cubic feet.
(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) 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 pledgor. The loan
contract shall provide a loan period that is a minimum of four
months, shall set forth the loan period and the date on which the
loan is due and payable, and shall clearly inform the pledgor of his
or her right to redeem the pledge during the loan period.
(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 pledgor's signature:
"You may redeem the property you have pledged at any time until
the close of business on ____ fill in date no less than 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."
(c) Every pawnbroker shall retain in his or her possession every
article pledged to him or her for the duration of the loan period.
During such period the pledgor may redeem the articles upon payment
of the amount of the loan and the applicable charges. If the 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 pledgor
the next calendar day when both the pawnbroker's store and the
storage facility are open, not to exceed two business days.
(d) If any pledged article is not redeemed during the loan period
as provided herein, and the pledgor and pawnbroker do not mutually
agree in writing to extend the loan period, the pawnbroker shall
notify the pledgor within one month after expiration of the loan
period. If the pawnbroker fails to notify the 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 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, at
the sole option of the pledgor, 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.
Electronic notice of the termination of the loan period shall be
valid if the pledgor has previously responded to an electronic
communication sent by the pawnbroker to the pledgor's last known
electronic address provided by the pledgor. Upon the initiation of
each new or replacement loan, the pledgor shall affirm that the
current electronic address on file with the pawnbroker is valid. The
10-day notice shall 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."
(e) The posted schedule of charges required pursuant to Section
21200.5 shall contain a notice informing the 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.
(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.
(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. Section 21205 is added to the Financial Code, to read:
21205. Representatives of the pawnbroker industry shall poll
their members annually to gather data relating to the current
financial condition of the California pawn industry.
SEC. 8. 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.
