ORD CC 12/14/76 - Pawn-broker bond requirementsORDINANCE NO. 76 -25
AN ORDINANCE AMENDING THE CODE OF ORDINANCES OF THE CITY OF HUNTSVILLE,
BY ADDING CHAPTER 13 -B, PROVIDING FOR LICENSING REQUIREMENTS :OF PAWN-
BROKERS, BOND REQUIREMENTS, FORM OF BOOKS AND RECORDS, PAWN WICKET,
UNREDEEMED PLEDGED GOODS, LOST OR DESTROYED TICKETS, INSPECTION OF
RECORDS AND ARTICLES, DAILY LISTS OF PURCHASES TO BE FURNISHED TO
POLICE, AND PROVIDING FOR A PENALTY FOR VIOLATION THEREOF.
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUNTSVILLE TEXAS,
THAT CHAPTER 13 -B OF THE CODE OF ORDINANCES OF THE CITY OF HUNTSVILLE,
TEXAS, IS ADDED AS FOLLOWS:
Section 1. Definitions.
For the purposes of this chapter, the following definitions
apply where such words appear in this chapter:
(a) PERSON -means an individual, partnership, corporation, joint
venture, trust, association or any other legal entity
however organized.
(b) PAWNBROKER- means any person engaged in the busihess of
lending money on the security of pledged goods; br engaged
in the business of purchasing tangible personal property on
condition that it may be redeemed or repurchased by the
seller for a fixed price within a fixed period of time.
(c) PLEDGED GOODS - means tangible personal property other than
choses in action, securities, or printed evidences of in-
debtedness, which property is deposited with or otherwise
actually delivered into the possession of a pawnbroker in
the course of his business in connection with a pawn trans-
action.
(d) PAWNSHOP - means the location at which or premises in which
a pawnbroker regularly conducts business.
(e)
MONTH - means that period of time from one date in a calendar
month to the corresponding date in the following calendar
month, but if there is no such corresponding date, then the
last day of such following month, and when computations are
made for a fraction of a month, a day shall be One- thirtieth
of a month.
the Consumer Credit Commissiioner as
01(1) of Chapter 274, Acts of the 60th
Session, 1967 (Article 5069 - 201(1),
Statutes), or his successor.
(f) COMMISSIONER - means
defined in Article 2.
Legislature, Regular
Vernon's Texas Civil
Section 2. License Required.
No person shall engage in business as a pawnbroker without first
obtaining a license from the Commissioner specifically authorizing
engagement in such business.
Section 3. Compliance with Chapter.
All persons managing, owning, maintaining or doing a pawnbrokering
business in the City shall comply with the terms of this Chapter.
Section 4. Bond - Required.
No person shall pursue the business of a pawnbroker without first
having given bond, with a surety company qualified to do business in
the State of Texas, in the sum of FIVE THOUSAND DOLLARS ($5,000.00),
which bond shall run to the City of Huntsville, Texas, for the use of
the City and of any person or persons who may have a cause of action
against the obligor of said bond under the provisions of this Chapter,
approved by the City Council and filed with the City Secretary, con-
ditioned that the obligor will comply with the provisions of this
Chapter and of all rules and regulations lawfully made by the
Commissioner, and will pay to the State and to any such person or
persons any and all amounts of money that may become due or owing to
the City or to such person or persons from said obligor under and by
virtue of the provisions of this Chapter during the time such bond
is in effect.
Section 5. Same - Recovery.
Any person injured by the failure of a pawnbroker to comply
faithfully with his contract, or with any requirement of law governing
the business of pawnbrokerage, may sue upon the bond of such pawn-
broker and recover such damages as he may prove himself entitled to,
not to exceed the penalty of such bond.
Section 6. Same - Suit.
Suit may be brought upon the bond of a pawnbroker by any party
entitled to the surplus of any sale made by him, and upon recovery
judgment shall be rendered against such pawnbroker and the surety
upon his bond for the amount of such surplus, together with ten
percent (10 %) on such amount for each month, or fraction of a month,
that such surplus has been illegally withheld by such pawnbroker.
Section 7. Effect on License.
Each license shall state the name of the licensee and the address
at which the business is to be conducted. The license shall be dis-
played at the place of business named in the license. The license
shall not be transferable or assignable except upon approval by the
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Commissioner. A separate license shall be required for each pawn-
shop operated under this Chapter.
Section 8. Form of Books and Records.
Each licensee shall keep, consistent with accepted accounting
practices, adequate books and records relating to the licensee's
pawn transactions, which books and records shall be preserved for
a period of at least two years from the date of the last transaction
recorded therein.
Section 9. Pawn Ticket.
The pawnbroker, at the time the pawn transaction is entered,
shall deliver to the pledgor a memorandum or ticket on which shall
be clearly set forth the following:
(a) the name and address of the pawnshop;
(b) the name and address of the pledgor and pledgor's'
description or the distinctive number from pledgor's
drivers license or military identification;
(c) the date of the transaction;
(d) an identification and description of the pledged
goods, including serial numbers if reasonably available;
(e) the amount of cash advanced or credit extended to the
pledgor, designated as the "amount financed;"
(f) the amount of the pawn service charge, designated as
the "finance charge;"
(g) the total amount (the total financed plus the finance
charge) which must be paid to redeem the pledged goods
on the maturity date, designated as the "total of payments;"
(h) the "annual percentage rate ", computed in accordance with
the regulations issued by the Federal Reserve Board of the
United States pursuant to the Truth -in- Lending Acct, Title
I, Act of May 29, 1968, Public Law 90 -321, 82 Stat. 146,
as amended;
(i) the maturity date of the pawn transaction;
(j) a statement to the effect that the pledgor is not obligated
to redeem the pledged goods, and that the pledged' may
be forfeited to the pawnbroker sixty (60) days afiter the
specified maturity date.
Section 10. Pledgor's Liability Prohibited.
A pledgor shall have no obligation to redeem pledged goods or
make any payment on a pawn transaction.
Section 11. Pawn Service Charge.
No pawnbroker may contract for, charge or receive any amount as
a charge for credit in connection with a pawn transaction other than
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a pawn service charge, and no pawn service charge may exceed the
charge disclosed in the pawn ticket or other memorandum delivered
to the pledgor. Upon service charge may not exceed an amount equal
to twenty per cent (20 %) of any amount of THIRTY DOLLARS ($ 30.00)
or less financed for one month, fifteen per cent (15 %) of the total
amount when the total amount is greater than Thirty Dollars ($ 30.00)
but not in excess of One Hundred Dollars ($ 100.00) financed for one
month, two and one -half percent (2 1/2 %) of the total amount when the
total amount is greater than One Hundred Dollars ($ 100.00) but not
in excess of THREE HUNDRED DOLLARS ($ 300.00) financed for one month,
and one percent (1 %) of the total amount when the total amount is
greater than Three Hundred Dollars ($ 300.00) financed for one month,
with proportionate adjustment for lesser periods of time, and in no
case shall the amount financed exceed Two Thousand Five Hundred Dollars
($ 2,500.00). In the event pawned merchandise is redeemed by the
pledgor prior to the maturity date of the pawn transaction, that
portion of the pawn service charge in excess of Fifteen Dollars ($ 15.00)
shall be reduced by an amount equal to one thirtieth (1 /30th) of the
total pawn service charge for each day between the day on which
redemption occurs and the original maturity date. The maturity date
of any pawn transaction may be changed to a subsequent date by agreement
between the pledgor and the pawn broker evidenced by a written memorandum,
a copy of which shall be supplied to the pledgor, which shall clearly
set out the new redemption date and any additional pawn service charge
to be paid. No pawnbroker shall separate or divide a pawn transaction
into two or more transactions for the purpose or with the effect of
obtaining a total pawn service charge in excess of that authorized for
an amount financed equal to the total of the amounts financed in the
resulting transactions.
Section 12. Unredeemed Pledged Goods.
Pledged goods not redeemed by the pledgor on or before the date
fixed and set out in the pawn ticket issued in connection with any
transaction shall be held by the pawnbroker for at least sixty (60)
days following such date, and may be redeemed by the pledgor within
such period by the payment of the originally agreed redemption price,
and the payment of an additional pawn service charge equal to one
thirtieth (1 /30th) of the original monthly pawn service charge for
each day following the original maturity date including the day on
which the pledged goods are finally redeemed. Pledged goods not
redeemed within sixty (60) days following the originally fixed maturity
date may thereafter, at the option of the pawnbroker, be forfeited and
become the property of the pawnbroker.
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Section 13. Presentation of Ticket: Presumption.
Any person properly indentifying himself and presenting a pawn
ticket to the pawnbroker shall be presumed to be entitled to redeem
the pledged goods described therein.
Section 14. Lost or Destroyed Ticket.
If the pawn ticket is lost, destroyed or stolen, the p edgor
may so notify the pawnbroker in writing, and receipt of such otice
shall invalidate such pawn ticket, if the pledged goods have of
previously been redeemed. Before delivering the pledged goods or
issuing a new pawn ticket, the pawnbroker shall require the pledgor
to make affidavit of the loss, destruction or theft of the ticket.
Section 15. Prohibited Practices.
A pawnbroker shall not:
(a) accept a pledge from a person under the age of eighteen
(18) years, provided that this provision shall hot apply
to any minor who has had the disability of mino ity removed.
(b) make an agreement requiring the personal liabil'ty of a
pledgor in connection with a pawn transaction,
(c) accept any waiver, in writing or otherwise, of any right
or protection accorded a pledgor under this act.
(d) fail to exercise reasonable care to protect pledged goods
from loss or damage.
(e) fail to return pledged goods to a pledgor upon 'payment
of the full amount due the pawnbroker on the pawn transaction.
(f) make any charge for insurance in connection with a pawn
transaction.
(g) enter any pawn transaction which has a maturit date more
than one month after the date of the transaction.
(h) display for sale in store front windows or sid walk display
case so that same may be viewed from the stree , any pistol,
dirk, dagger, blackjack, hand chain, sword cane, knuckles
made of any metal or any hard substance, switc blade knife,
springblade knife, or throwblade knife, or depict same on
any sign or advertisement which may be viewed rom the
street.
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Section 16. Sale of Unredeemed Goods
All sales of unredeemed goods made by a pawnbroker shall be
made between the hours of 7:00 A.M. and 7:00 P.M. No sales shall be
made upon Sunday.
Section 17. Same- Report.
When a sale of unredeemed articles has been made, the pawnbroker
shall, within five (5) days thereafter, file with the Chief of Police
a report in writing and under oath, the following:
(a) The time and place of such sale.
(b) A full description of the property sold and by whom deposited
(c) By whom purchased and the amount for which each article
was sold.
Section 18. Inspection of Records and Articles
The records and the articles themselves so pledged or sold shall
at all reasonable times be subject to inspection and examination by
the Chief of Police or anyone he shall designate. All pawnbrokers
shall have their goods arranged in stock so as to enable the same to
be inspected by the Chief of Police and those in their company. It
shall be unlawful for any such dealer to refuse to admit such officer
to such place of business to inspect such property.
Section 19. Daily list of Purchases to be Furnished to Police.
All pawnbrokers shall furnish to the Chief of Police a full and
complete list each day of every article taken in pawn or brought by
such dealers, giving a full description of same, maker, marks, number,
brand, monogram or letter of any kind on such article so pawned or
brought by such dealer, together with the name and address of the person
from whom such article was secured. Any such dealer refusing or failing
to furnish such list shall be deemed guilty of a violation of this
section.
Section 20. Responsibility of Owners, etc. for Employees or Agents.
Any owner, manager or operator of any pawnbroking business whose
employees or agents fail to observe any of the provisions of this
chapter shall be equally guilty with the offender and subject to the
same penalties.
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Section 21. Penalties.
(a) Any person who engages in the business of operati g a
pawnshop without first securing the license presc ibed
shall be guilty of a misdemeanor and upon convict on
thereof shall be punished by a fine not in excess of
ONE THOUSAND DOLLARS ($ 1,000.00) or by confinement in
the County Jail for not more than six months, or both.
(b) Any licensee who violates this chapter by contrac ing
for, charging or receiving a pawn service charge n
excess of that authorized by this act or by faili g to
perform any duty imposed herein or by the commission of
any act or practice herein prohibited shall forfeit the
right to collect twice the amount of the pawn serxfrice
charge contracted for in the pawn transaction and upon
the pledgors request shall be obligated to return to
the pledgor the pledged goods delivered to the licensee
in connection with the pawn transaction upon payment of
the balance remaining due, provided that there shall be
no penalty for a violation resulting from an accidental
and bona fide error, corrected upon discovery.
(c) Any licensee who violates this act by contracting for,
charging or receiving a pawn service charge in ex ess
of twice the amount authorized by this chapter shall
forfeit the right to collect any amount on the pavtn
transaction and upon the pledgor's request shall be
obligated to return to the pledgor the pledged goods
delivered to the licensee in connection with the pawn
transaction, provided that there shall be no penalty for
a violation resulting from an accidental and bona fide
error, corrected upon discovery.
(d) In addition to any other penalty which may be applicable,
any licensee who willfully violates any provision lof this
chapter or who willfully makes a false entry in any records
specifically required by this act shall be guilty of a
misdemeanor and upon conviction thereof shall be punished
by a fine not in excess of One Thousand Dollars ($ 1,000.00)
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Section 22. Invalidating Clause
If any provision, section, subsection, paragraph, sentence,
clause or phrase of this ordinance or the application of same to any
person or set of circumstances, shall for any reason be held unconsti
tutional, void or invalid, such invalidity shall not affect the validity
of the remaining provisions of this ordinance or their application to
other persons or sets of circumstances and to this end, all provisions
of this ordinance are declared to be severable.
PASSED AND APPROVED IN OPEN COUNCIL BY THE CITY COUN IL OF THE
CITY OF HUNTSVILLE, TEXAS ON THIS THE _ .4/P DAY OF D,O,Q/n"
A.D: 1976.
MORRIS I. WALLER, MAYOR
CITY ATTORNEY
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