Chapter 2. Pawnbroker Regulations of California Financial Code >> Division 8. >> Chapter 2.
(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
(2) A charge not exceeding three dollars ($3) a month on any loan
when the monthly charge permitted by paragraph (1) would otherwise be
(b) One month's interest may be charged for any part of the month
in which pawned property is redeemed.
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.
A pawnbroker may charge as prescribed in the following
(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
(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
(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.
(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
(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.
The maximum charge of compensation charged by a pawnbroker
pursuant to the authority of Section 21200 shall be posted in a
place clearly visible to the general public.
In addition to other allowed charges, a pawnbroker may
collect a processing charge of four dollars ($4) for each firearm
No licensed pawnbroker shall promise any seller of
tangible personal property that the seller may repurchase property
sold to the pawnbroker.
(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
(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
Whenever a pledger, or his or her assignee, loses a pawn
ticket, a fee of not to exceed ten dollars ($10) may be charged for
services of verifying the identification of the claimant,
fingerprinting the claimant, and having the claimant execute a
declaration under penalty of perjury.
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.
(a) The written contract required pursuant to Section
21201 shall contain a provision in 8-point type stating whether the
item or items pledged are to be stored at the business premises of
the pawnbroker and adjacent to this provision, the following
disclosure shall be made: "We must return your property within two
business days if your property is stored off premises."
(b) Every pawnbroker shall display a sign at his or her premises
indicating whether or not pawned items are insured.
(c) If a pawnbroker stores pledged property at a location other
than the pawnshop, the pawnbroker shall post a conspicuous sign
stating that pawned items may be stored off premises with the consent
of the pledgor and that following the redemption of a loan, property
is required to be returned the next calendar day upon which both the
pawnbroker's store and the storage facility are open, not to exceed
two business days.
(d) Notwithstanding Section 21209, a violation of this section is
(e) This section shall become operative July 1, 1995.
Charges for the first three months of any loan made
pursuant to the written contract required by Section 21201 or 21201.5
shall be determined by the application of the schedule of charges
contained in Section 21200.5. Charges for any extension of time
following the first three months of any loan shall be determined by
application of the schedule of maximum compensation contained in
(a) During the contractual loan period and any extension
thereof, but prior to the start of the 10-day grace period provided
in subdivision (d) of Section 21201, a pledgor may request, and a
pawnbroker may consent to, a replacement loan to take effect upon the
expiration of the loan period stated in the active loan contract
delivered to the pledgor under Section 21201 or this section.
(b) Alternatively, a pledgor may request, and a pawnbroker may
consent to, a replacement loan during the 10-day grace period
provided in subdivision (d) of Section 21201. Any such replacement
loan shall become effective on the date it is issued.
(c) All of the following shall apply to a replacement loan issued
pursuant to this section:
(1) The loan shall be processed as, and deemed to be, a new loan
subject to all other fees and charges permitted by this chapter.
(2) Before a replacement loan may be issued, the pledgor shall pay
off all outstanding charges from the prior loan then due, including
interest or any loan writing, storage, notification, or other fee
authorized in this chapter, in cash or another form acceptable to the
pawnbroker. The pledgor's payment may be delivered to the pawnbroker
by any method acceptable to the pawnbroker, including, but not
limited to, United States mail, private mail, a personal
representative, or electronic transfer. If insufficient payment is
tendered by the pledgor or is not tendered in cash or a form
acceptable to the pawnbroker, the pawnbroker shall, if commercially
reasonable, return the payment in the same manner that the payment
was delivered by the pledgor, or by another commercially reasonable
manner, within five business days, and shall include a statement
advising the pledgor the reason the payment was rejected. The
pawnbroker is under no obligation to enter into a replacement loan if
the amount is insufficient or the method of payment or form of
tender is not cash or acceptable to the pawnbroker.
(3) The unpaid balance of the prior loan shall be debited to the
replacement loan on which the same article or articles have been
pledged. The replacement loan contract shall disclose the amount of
the prior loan that is debited and shall otherwise be consistent with
(4) If the pledgor requests a replacement loan in person or
electronically, the pledgor's consent to the terms of the replacement
loan shall be deemed given when he or she signs the written
replacement loan contract in person or electronically in conformity
with Section 21201.6.
(5) If the pledgor requests a replacement loan by mail or through
a personal representative, the pledgor's consent to the terms of the
replacement loan shall be deemed given when all required charges from
the prior loan then due are paid in a form acceptable to the
pawnbroker. The principal amount of a replacement loan requested by
mail or through a personal representative shall not exceed the
principal amount of the prior loan.
(6) The terms of the replacement loan shall be consistent with
this chapter on the date the replacement loan is issued.
(7) The replacement loan shall be evidenced by a written agreement
or electronic record. The pawnbroker shall mail or otherwise
transmit a copy of the written agreement or electronic record to the
pledgor within five business days following receipt of payment by
means for which verification of mailing or electronic transmittal can
be provided by the pawnbroker.
The requirement for a written contract signed by the
pledgor as set forth in Section 21201.5 may be met electronically if
all of the following conditions are satisfied:
(a) The contract and transaction comply with the provisions of the
Uniform Electronic Transactions Act, as set forth in Title 2.5
(commencing with Section 1633.1) of Part 2 of Division 3 of the Civil
Code, as may be applicable at the time that the loan is entered into
between the pawnbroker and the pledgor.
(b) Any written disclosures specified in this chapter to be set
forth in a specified minimum type size are conspicuously presented to
the pledgor prior to his or her execution of the electronic
(c) The pawnbroker makes one of the following disclosures:
(1) If the principal loan amount is below two thousand five
hundred dollars ($2,500), the pawnbroker discloses the maximum
compensation due a pawnbroker as set forth in Section 21200.7 prior
to the pledgor's execution of the electronic contract.
(2) If the principal loan amount is two thousand five hundred
dollars ($2,500) or more, the pawnbroker discloses the provisions of
Sections 21051 and 22054 prior to the pledgor's execution of the
Every pawnbroker shall enter at the time of the transaction,
in records of loans and pledges kept by him for that purpose, the
date, duration, amount, and rate of interest or charges of every loan
made by him, a reasonably accurate description of the property
pledged, the name and residence address of the pledgor. Every
pawnbroker shall deliver to the pledgor a written copy of such entry.
Such written copy need not include the name and address of the
Any property held in pawn which is not subject to a hold
pursuant to Section 21647 of the Business and Professions Code shall
be returned to the pledgor immediately upon redemption of the loan.
However, if the property is stored off the business premises of the
pawnbroker, following the redemption of the loan the property shall
be returned the next calendar day when both the pawnbroker's store
and the storage facility are open, not to exceed two business days.
Every pawnbroker, upon redemption of a loan contract, shall
provide the borrower with a receipt that correctly states in detail
all of the fees, charges, and compensation paid by the borrower to
Representatives of the pawnbroker industry shall poll their
members annually to gather data relating to the current financial
condition of the California pawn industry.
Every pawnbroker shall produce his or her records of loans
and all pledged property, for inspection by the following persons:
(a) Any officer holding a warrant authorizing him or her to search
for personal property.
(b) Any peace officer or employee designated by the chief of
police or sheriff.
(c) Any officer holding a court order directing him or her to
examine such records or pledged property.
Whenever any property is taken from a pawnbroker by a
peace officer which is alleged to be stolen property, the police
officer shall give the pawnbroker a receipt for the property which
shall contain a description of the property, the reason for seizure,
and the names of the pawnbroker and the officer.
(a) Notwithstanding the provisions of Chapter 12
(commencing with Section 1407) of Title 10 of Part 2 of the Penal
Code, whenever property alleged to have been lost, stolen, or
embezzled is taken from a pawnbroker, the peace officer, magistrate,
court, clerk, or other person having custody of the property shall
not deliver the property to any person claiming ownership unless the
provisions of this section are complied with.
(b) (1) If any person makes a claim of ownership, the person shall
file a written statement, signed under penalty of perjury, stating
the factual basis upon which they claim ownership or an interest in
the property with the person having custody of the property, and the
person having custody of the property shall notify the pawnbroker of
the claim by providing a true and correct copy of the claim to the
(2) If the pawnbroker makes no claim with respect to the property
within 10 days of such notification, the property may be disposed of
as otherwise provided by law.
(3) In adjudicating the competing claims of a pawnbroker and a
person claiming ownership or an interest in the property seized from
a pawnbroker, the adjudicating court shall give due consideration to
the effect Section 2403 of the Commercial Code may have on the
(4) At least 30 calendar days before any hearing adjudicating any
competing claims of a pawnbroker and a person claiming ownership or
an interest in the property, the person having custody of the
property shall deliver to the pawnbroker a true and correct copy of
the police report, redacted as may be required by law and consistent
with due process of law, substantiating the basis of the seizure of
the property from the pawnbroker.
(c) If property alleged to have been stolen or embezzled is taken
from a pawnbroker, prior to any disposal of the property pursuant to
Section 1411 of the Penal Code, the notice to be given to the owner
and owner of a security interest pursuant to Section 1411 shall be
given to the pawnbroker. Such property shall not be disposed of
pursuant to Section 1411 until three months after such notice has
(d) A pawnbroker shall not be liable to any person for any
property seized from the pawnbroker on account of the pawnbroker's
inability to return the property to that person because of the
No pawnbroker shall receive anything in pledge from any
person who is a minor.
A pawnbroker shall comply with the reporting requirements
imposed on secondhand dealers under Article 4 (commencing with
Section 21625) of Chapter 9 of Division 8 of the Business and
The violation of any provision of this chapter under
circumstances where a person knows or should have known that a
violation was being committed is a misdemeanor.