Chapter 2 - Pawnbroker Regulations

California Financial Code — §§ 21200-21209

Sections (25)

Amended by Stats. 2015, Ch. 245, Sec. 1. (SB 285) Effective January 1, 2016.

(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.

§ 21200.1

Amended by Stats. 2019, Ch. 189, Sec. 1. (AB 1186) Effective January 1, 2020.

A loan setup fee of seven dollars and fifty cents ($7.50) or 3.5 percent, whichever is greater, may be charged for each loan. However, the maximum loan setup fee shall not exceed ninety dollars ($90). Loan setup fees are in addition to any other allowed charges.

§ 21200.5

Amended by Stats. 2015, Ch. 245, Sec. 3. (SB 285) Effective January 1, 2016.

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.

§ 21200.6

Amended by Stats. 2024, Ch. 185, Sec. 1. (SB 1198) Effective January 1, 2025.

(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, storage, and security charge for pawned articles. The maximum amount that may be charged pursuant to this section is in accordance with the following schedule:

(1)Five dollars ($5) or 2.5 percent of the loan amount for any article that can be contained within one cubic foot.

(2)Ten dollars ($10) or 2.5 percent of the loan amount for any article that cannot be contained within one cubic foot, but can be contained within three cubic feet.

(3)Twenty dollars ($20) or 2.5 percent of the loan amount for any article that cannot be contained within three cubic feet, but can be contained within six cubic feet.

(4)Thirty dollars ($30) or 2.5 percent of the loan amount for any article that cannot be contained within six cubic feet and five dollars ($5) 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.

§ 21200.7

Added by renumbering Section 21200.5 by Stats. 1969, Ch. 25.

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.

§ 21200.8

Amended by Stats. 2019, Ch. 189, Sec. 3. (AB 1186) Effective January 1, 2020.

In addition to other allowed charges, a pawnbroker may collect a processing charge of twenty dollars ($20) for each firearm pawned.

§ 21200.9

Added by Stats. 2024, Ch. 185, Sec. 3. (SB 1198) Effective January 1, 2025.

In addition to other allowed charges, a pawnbroker may collect a remote transaction fee, if the pledgor elects to request a replacement loan or to redeem a loan through electronic means, of up to 3.0 percent of the transaction amount to cover the recurring costs associated with software applications.

§ 21200.10

Added by renumbering Section 21200.9 by Stats. 2024, Ch. 185, Sec. 2. (SB 1198) Effective January 1, 2025.

No licensed pawnbroker shall promise any seller of tangible personal property that the seller may repurchase property sold to the pawnbroker.

§ 21201

Amended by Stats. 2019, Ch. 189, Sec. 4. (AB 1186) Effective January 1, 2020.

(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 their 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 their possession every article pledged to them for the duration of the loan period. During that 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 the pledgor’s 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 they desire, 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 the pledgor’s assigns, to the pledged article, to hold and dispose of as the pawnbroker’s 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 they have 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.

§ 21201.1

Added by Stats. 1991, Ch. 202, Sec. 3.

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.

§ 21201.2

Amended by Stats. 2024, Ch. 185, Sec. 4. (SB 1198) Effective January 1, 2025.

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 seven dollars ($7) for services and costs pertaining to the preparation and mailing or electronic transmission of the notice, in addition to any other allowed charges.

§ 21201.3

Amended by Stats. 2002, Ch. 404, Sec. 2. Effective January 1, 2003.

(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 an infraction.

(e)This section shall become operative July 1, 1995.

§ 21201.4

Amended by Stats. 2011, Ch. 318, Sec. 5. (AB 424) Effective January 1, 2012.

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 Section 21200.

§ 21201.5

Amended by Stats. 2015, Ch. 417, Sec. 3. (SB 300) Effective January 1, 2016.

(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 Section 21201.

(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.

§ 21201.6

Added by Stats. 2015, Ch. 417, Sec. 4. (SB 300) Effective January 1, 2016.

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 contract.

(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 electronic contract.

§ 21202

Amended by Stats. 1979, Ch. 1037.

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 pledgor.

§ 21203

Amended by Stats. 2002, Ch. 404, Sec. 4. Effective January 1, 2003.

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.

§ 21204

Added by Stats. 1998, Ch. 804, Sec. 2. Effective January 1, 1999.

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 the pawnbroker.

§ 21205

Added by Stats. 2015, Ch. 245, Sec. 7. (SB 285) Effective January 1, 2016.

Representatives of the pawnbroker industry shall poll their members annually to gather data relating to the current financial condition of the California pawn industry.

§ 21206

Amended by Stats. 1992, Ch. 647, Sec. 8. Effective January 1, 1993.

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.

§ 21206.7

Added by Stats. 1979, Ch. 1037.

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.

§ 21206.8

Amended by Stats. 2013, Ch. 318, Sec. 2. (SB 762) Effective January 1, 2014.

(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 pawnbroker.

(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 claims.

(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 been given.

(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 seizure.

§ 21207

Amended by Stats. 1989, Ch. 1418, Sec. 4.

No pawnbroker shall receive anything in pledge from any person who is a minor.

§ 21208

Repealed and added by Stats. 2012, Ch. 172, Sec. 8. (AB 391) Effective August 17, 2012.

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 Professions Code.

§ 21209

Amended by Stats. 1986, Ch. 826, Sec. 7.

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.