PROPOSED RULEMAKING
DEPARTMENT OF BANKING
[10 PA. CODE CHS. 61, 63, 65 AND 67]
Pawnbrokers License
[27 Pa.B. 1809] The Department of Banking (Department), under the Pawnbrokers License Act (act) (63 P. S. §§ 281-1--281-32), and the authority given to the Department to promulgate regulations in section 8 of the act (63 P. S. § 281-8), proposes to amend Chapters 61, 63, 65 and 67 to read as set forth in Annex A. The amendments will impose procedures for initial requirements, restrictions on the usage of the name ''pawn'' and ''pawnbroker'' in this Commonwealth, and assessment by licensees of a $1 charge for governmental reporting costs and license changes of licensees' office location.
Purpose
The purpose of these proposed amendments is to implement the act of December 28, 1994 (P. L. 1402, No. 163) (Act 163) which amended sections 2, 4, 4.1, 5.1, 6, 8 and 12 of the act (63 P. S. §§ 281-2, 281-4, 281-4.1, 281-5.1, 281-6, 281-8 and 281-12). The Secretary of the Department is authorized by section 8 of the act to issue regulations that may be necessary for the protection of the public and to insure the proper conduct of the pawnbroker business and enforcement of the act. The purposes of the proposed amendments are consistent with the requirements of Act 163 and the authority of the Secretary of Banking to issue regulations.
Explanation of Regulatory Requirements
The proposed amendments to the existing regulations provide procedures for initial pawnbroker license applications, including posting a notice of initial application and hearing at the proposed pawnbroker location and publishing notice of the hearing in a newspaper of general circulation. The proposed amendments also require a newspaper notice of renewal application to be published in a newspaper of general circulation by an applicant for renewal of a pawnbroker license. A change of place of business by a licensed pawnbroker could not be implemented until a notice of proposed relocation had been posted at the proposed new office location. Use of the formal name or fictitious name ''pawn'' or ''pawnbroker'' would not be permissible unless the entity using the formal name or fictitious name was a licensed pawnbroker under the act. Use of the terms ''pawn'' or ''pawnbroker'' would not be permissible in any advertisement unless the person or entity using the name was a licensed pawnbroker. A $1 charge per pledge could be assessed by a licensee to cover only governmental reporting costs pertaining to reports required to be issued by a licensee to the local or State police pertaining to a particular pledge, or as otherwise permitted by the Secretary of the Department. The minimum start-up and ongoing capital requirement applicable to an initial applicant or renewal applicant for a pawnbroker license would be $10,000 per licensed pawnbroker office. The licensee would be required to report counterfeit pawn tickets to local police authorities. Interest and charges would be amended consistent with the statutory amendments to permit 3% per month aggregate interest and charges on the entire principal amount.
Entities Affected
The number of entities that will be affected by these proposed amendments are as follows:
(1) An estimated five to ten initial applicants for pawnbroker licenses per annum regarding the hearing requirements applicable to initial applicants.
(2) The approximately 77 licensed pawnbrokers in this Commonwealth regarding the minimum capital requirements.
(3) The approximately 77 licensed pawnbrokers regarding the $1 charge per pledge that may be assessed by a licensee to cover governmental reporting costs.
(4) The approximately 77 licensed pawnbrokers regarding the newspaper notice of renewal application to be published in a newspaper of general circulation.
(5) An estimated one or two licensed pawnbrokers per annum who might seek to relocate their licensed offices would have to post at the proposed new office location a notice of proposed relocation.
(6) An estimated two or three unlicensed entities per annum would be restricted from utilizing the word ''pawn'' or ''pawnbroker'' in an advertisement or in their name or fictitious name unless licensed as pawnbrokers under the act.
Cost and Paperwork Requirements
These proposed amendments will impose paperwork requirements on the Department to process initial pawnbroker license application hearings, and the notices of license application applicable to initial applicants and renewal applicants respectively.
These proposed amendments will not impose paperwork requirements on any political subdivision and will not affect the costs of any political subdivision of the Commonwealth.
Costs of hearing shall be paid by the initial applicant, including costs for stenographer services, transcript printing costs and Department expenses for providing a designee of the Secretary of the Department to preside at the public hearing.
Effectiveness/Sunset Date
The anticipated effective date is 30 days after final adoption.
A sunset date is inapplicable as the statute imposes an ongoing requirement for the licensing and regulation of pawnbrokers.
Contact Person
Interested persons are invited to submit their written comments, if any, within 30 days of the date of this publication, to Reginald S. Evans, Chief Counsel, Department of Banking, 333 Market Street, 16th Floor, Harrisburg, PA 17101-2290, (717) 787-1471.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on April 1, 1997, the Department submitted a copy of these proposed amendments to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the House Committee for Business and Economic Development and the Senate Committee on Banking and Insurance. In addition to submitting the proposed amendments, the Department has provided IRRC and the Committees with a copy of a detailed Regulatory Analysis Form prepared by the Department in compliance with Executive Order 1982-2, ''Improving Government Regulations.'' A copy of this material is available to the public upon request.
If IRRC has objections to any portion of the proposed amendments, it will notify the Department within 30 days of the close of the public comment period. The notification shall specify the regulatory review criteria which have not been met by that portion. The Regulatory Review Act specifies detailed procedures for review and comments including objections to the proposed amendments by IRRC, the General Assembly and the Office of Attorney General, prior to final publication and approval of the proposal.
RICHARD RISHEL,
SecretaryFiscal Note: 3-33. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 10. BANKS AND BANKING
PART V. PAWNBROKERS
CHAPTER 61. GENERAL PROVISIONS § 61.1. Definitions.
The following words and terms, when used in this [Part, shall] part, have the following meanings, unless the context clearly indicates otherwise:
Act--The Pawnbrokers License Act (63 P. S. §§ 281-1--281-32).
Capital--Tangible net worth which shall be maintained at all times by the licensee.
* * * * * Department--The Department of Banking of the Commonwealth.
Initial applicant--An individual, partnership, association, business corporation, nonprofit corporation, common law trust, joint-stock company or a group of individuals however organized applying for a license under the act or a person appearing as owner, partner, officer, director, trustee or other official of a partnership, association, business corporation, nonprofit corporation, common law trust, joint-stock company or a group of individuals however organized, on the application for license under the act. This application for license does not possess a license for the license term that expires immediately prior to the term being applied for regarding the proposed license location.
License--A license issued by the Secretary under the act that permits an initial applicant or renewal applicant to engage in the pawnbroker business at a particular business location to the extent provided in the license's terms.
* * * * * Newspaper notice of renewal application--The written notice in a form prescribed by the Department, which is to be advertised in a newspaper of general circulation by a renewal applicant for a pawnbroker's renewal license. The advertisement shall be in a form prescribed by the Department.
Newspaper of general circulation--A newspaper issued daily, or not less than once per week, intended for general distribution and circulation, sold at fixed prices per day or week, published in the English language, which satisfies the requirements of 45 Pa.C.S. §§ 301--310 (relating to Newspaper Advertising Act). The newspaper shall be one of the following:
(i) A newspaper which is one of general circulation in the county and is published in the city, borough or township in which the pawnbroker's office is to be located or already is located.
(ii) If there is no newspaper of the type described in subparagraph (i), a newspaper of general circulation in the county, published at the county seat.
(iii) If there is no newspaper of the type described in subparagraphs (i) and (ii), a newspaper of general circulation published in the county at the place nearest the city, borough or township.
(iv) If there is no newspaper of the type described in subparagraphs (i)--(iii), the newspaper of general circulation published at the place nearest the city, borough or township in an adjoining county.
Newspaper publications required by the act and this part shall be at the cost of the applicant for license.
Newspaper notice of hearing--The written notice in a form prescribed by the Department, which is to be published in a newspaper of general circulation by an initial applicant for a new pawnbroker's license.
Notice of initial application and hearing--The written notice in a form prescribed by the Department, which is to be posted by an initial applicant for a new pawnbroker's license at the proposed pawnbroker's business location, as further specified in this part.
Renewal applicant--The definition applies, except that the renewal applicant does possess a license for the license term that expires immediately prior to the renewal term being applied for regarding the licensed location.
Resident--A person as defined in section 2 of the act (63 P. S. § 281-2) residing or operating at an address within 500 feet of an initial applicant's proposed new pawnbroker's business location.
Secretary--The Secretary of the Department or a person designated by the Secretary. This definition contemplates, among other things, that a designee of the Secretary may preside over a hearing required by the act.
§ 61.2. License applications, public notice, hearings and capital requirements.
(a) Blank forms of application and bond will be supplied by the Department upon request. A license fee [of $100] is required.
(b) Licenses shall be issued on the basis of information [set forth] in the application for license. Changes in title, place of business, office manager, owner, partners or corporate officials occurring during a license year shall require prior written approval of the Department.
(c) Every initial applicant for a license shall post a notice of initial application and hearing for at least 30 days beginning with the day the application is accepted as filed with the Secretary, in a conspicuous place at the proposed location for which the initial applicant has applied for a license, unless another location for posting the notice of initial application and hearing is approved by the Secretary. The notice of initial application and hearing shall be in the form prescribed by the Secretary. The conspicuous place of posting the notice of initial application and hearing shall face to the outside of the proposed location for which the initial applicant is applying, so that persons observing the normal main window or facade of the proposed location may readily see and read the notice of initial application and hearing, unless otherwise permitted by the Secretary due to the circumstances of the proposed pawnbroker location. At the end of at least 30 days continual posting of the notice of initial application and hearing, the initial applicant shall deliver to the Department an affidavit in a completed form as prescribed by the Department certifying that the notice of initial application and hearing has been properly posted for the required 30 day time period. A photocopy of the completed notice of initial application and hearing also shall be provided by the initial applicant to the Department as part of the initial application.
(d) A public hearing shall be held regarding a pawnbroker's license application submitted by an initial applicant. The public hearing is a fact-gathering mechanism to assist the Department in its review of the initial applicant's pawnbroker's license application while providing an opportunity for interested residents to testify regarding matters relevant to the Secretary's consideration of whether to approve the initial applicant's license application for the proposed location.
(1) A hearing regarding an initial applicant's license application will not be held by the Department until after the Department has accepted as complete a license application from the initial applicant. The initial applicant shall provide the affidavit required in subsection (c) certifying to the posting of the notice of initial application and hearing for the requisite 30-day time period, and a proof of publication of a newspaper notice of hearing.
(2) The separate newspaper notice of hearing shall be published at least once in a newspaper of general circulation at least 10 days prior to the hearing date. The initial applicant shall cause proof of publication of the newspaper notice of hearing to be provided to the Department in a written form issued and executed by a representative of the newspaper.
(3) The hearing shall occur at a date, time and place deemed appropriate in the sole reasonable discretion of the Secretary.
(4) The Secretary will preside over the hearing. The hearing rules in 1 Pa. Code Part II (relating to general rules of administrative practice and procedure) and Chapter 3 (relating to hearings and conferences) do not apply to hearings regarding an initial applicant, as described in this section, because of the fact-gathering nature of these hearings. Formal rules of evidence do not apply to these hearings. The Secretary has the authority to swear witnesses at a hearing. Procedural issues regarding a hearing will be determined by the Secretary.
(5) Witness testimony may be limited as to time by the Secretary. The initial applicant may testify once after all witnesses, if any, have testified. Residents attending the hearing and seeking to testify shall be permitted to testify. The number of witnesses including resident witnesses may be restricted in the sole discretion of the Secretary, including, but not limited to, circumstances in which the Secretary determines that witnesses seek to offer similar testimony or to facilitate completion of the hearing within a reasonable time. Witnesses other than residents may be permitted to testify at the hearing, in the sole discretion of the Secretary.
(6) Costs of the hearing shall be paid by the initial applicant, including the costs for stenographer services, transcript printing costs and Department expenses for providing a designee of the Secretary to preside at the public hearing. Two copies of the hearing transcript shall be provided to the Department. If there is no testimony at the hearing, the transcript requirement shall be waived by the Secretary.
[(c)] (e) Licenses shall expire on October 1 of each year. Applications for renewal shall be filed with the Department at least 30 days before the end of the license year. Applications for renewal shall be accompanied by a new bond and a check or money order [for $100] payable to the Commonwealth of Pennsylvania. The renewal applicant shall cause a newspaper notice of renewal application to be published once, in a form prescribed by the Department at least 30 days prior to license renewal. The renewal applicant shall cause proof of publication to be provided to the Department in a written form issued and executed by a representative of the newspaper of general circulation. The Secretary will consider written comments timely received after publication of the newspaper notice of renewal application.
(f) The minimum start-up capital requirement applicable to an initial applicant for a license is $10,000 per licensed pawnbroker office. The ongoing capital requirement applicable to a renewal applicant is $10,000 per licensed pawnbroker office. If there are multiple licensed offices held by the same licensee, the maximum total capital requirement for all of the offices is $100,000. The minimum capitalization shall be maintained as permanent capital which may not be distributed to a stockholder or owner of the licensee or be purchased by a licensee without the prior written approval of the Secretary. Licensees holding valid licenses on _____ (Editor's Note: The blank refers to the effective date of adoption of this proposal) shall meet the minimum capitalization requirements in this section by _____ (Editor's Note: The blank refers to a date 2 years after the effective date of adoption of this proposal).
(g) Applicants for a pawnbroker's license shall demonstrate that the proposed pawnbroker's location contains security measures and devices, such as a vault for the storage of pledge items, for the conduct of a pawnbroker's business under the circumstances of that location. The initial applicant shall demonstrate to the Department's reasonable satisfaction that the initial applicant has the requisite experience or knowledge, or both, to conduct the business of a pawnbroker under the act and this part. The knowledge or experience may include retaining an office manager with at least 1 year of knowledge and experience in the pawnbroker business or other business experience determined to be relevant in the Department's reasonable discretion. Renewal applicants shall demonstrate to the Department's reasonable satisfaction that the renewal applicant continues to have the requisite experience or knowledge to conduct the business of a pawnbroker under the act and this part.
[(d)] (h) ***
§ 61.3. Change of place of business.
(a) Any change of place of business of a pawnbroker shall require prior approval of the Department, which will not be provided until a notice of proposed relocation has been posted at the proposed new office location for at least 30 days. The notice of proposed relocation shall be in the form prescribed by the Secretary and shall contain language requesting public comment on the proposed relocation. The conspicuous place of posting the notice of proposed relocation shall face to the outside of the proposed new location, so that persons observing the normal main window or facade of the proposed new location may readily see and read the notice of proposed relocation, unless otherwise permitted by the Secretary due to the circumstances of the proposed new location. At the end of at least 30 days continual posting of the notice of proposed relocation, the licensee shall deliver to the Department an affidavit in a completed form as prescribed by the Department certifying that the notice of proposed relocation has been properly posted for the required 30-day time period. A photocopy of the completed notice of proposed relocation also shall be provided by the licensee to the Department as part of the request to change place of business.
* * * * * (c) Licensees who wish to change their place of business to a municipality other than that indicated on the current license shall obtain a new license by filing a new application and bond and paying the license fee [of $100].
* * * * * § 61.4. Partnerships.
* * * * * (b) [Any] A change in a partnership occurring during a license year and requiring a new license shall require the payment of an additional license fee [of $100].
§ 61.5. Fictitious names and other name usage.
(a) The conduct of business by a licensee under [any] an assumed or fictitious trade name is prohibited unless the following conditions are met:
(1) [the] The licensee has complied with [the Fictitious Corporate Name Act (15 P. S. § 51 et seq.) or the act of May 24, 1945, P. L. 967 (54 P. S. § 28.1 et seq.)] 54 Pa.C.S. (relating to names), as applicable[, and].
* * * * * (c) A person or entity which is not a licensee under the act is prohibited from using in its name or fictitious name the words ''pawn'' or ''pawnbroker'' or any similar terms. Notwithstanding regulation under the act to the contrary, a person or entity may use its name or fictitious name legally in use on _____ (Editor's Note: The blank refers to the effective date of adoption of this proposal).
(d) A person or entity which is not a licensee under the act is prohibited from advertising in any manner as a pawnbroker, and from using the words ''pawn'' or ''pawnbroker'' in a heading to or otherwise in any advertisement. Notwithstanding any regulation under the act to the contrary, advertisements in use on _____ (Editor's Note: The blank refers to the effective date of adoption of this proposal) may be used but may not be renewed.
§ 61.6. Examinations.
* * * * * (c) In case of nonpayment, the Department is authorized to recover the cost of examination [either] from the following:
(1) [from the] The surety on the bond[; or].
(2) [by the] The institution of court action against the licensee.
CHAPTER 63. CHARGES, PAYMENT AND RECORDS
CHARGES § 63.1. Interest and charges.
The prescribed maximum total charges, including interest, shall be equivalent to an aggregate rate of [3.0] 3% per month on that part of the unpaid principle balance of any loan [not in excess of $150, and 2.0% per month on any remainder of such unpaid principal balance].
§ 63.5. Charge for reports to police.
A charge of $1 per pledge may be assessed and collected by a licensee to cover only those governmental reporting costs pertaining to reports required to be issued by a licensee to the local or State police pertaining to that pledge, or as otherwise permitted by the Secretary.
CHAPTER 65. PAWN TICKETS § 65.9. Counterfeit ticket.
Whenever a counterfeit pawn ticket is presented to a licensee, the licensee may seize and retain [such] the ticket. Upon seizure of a counterfeit pawn ticket, the licensee shall immediately notify the Department and local police authorities.
CHAPTER 67. SALE OF PLEDGE
GENERAL PROVISIONS § 67.2. Time.
(a) Pledges [shall] may not be sold prior to the expiration of 90 days after the due [notice] date of the loan, except as otherwise provided in subsection (b) [of this section].
* * * * *
[Pa.B. Doc. No. 97-552. Filed for public inspection April 11, 1997, 9:00 a.m.]
No part of the information on this site may be reproduced for profit or sold for profit.This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
