Pawnbrokers.

Existing law regulates the sale and redemption of pledged property by pawnbrokers. Existing law authorizes a pawnbroker to charge or receive compensation at a rate not exceeding specified amounts based upon the unpaid principal balance of the loan, but at least $3 per month. Existing law also sets forth a schedule of charges applicable to these loans and authorizes a pawnbroker to impose a charge of $1 on any loan for not more than 30 days which does not exceed $14.99. Existing law requires loans made by pawnbrokers to be evidenced by a written contract. Existing law requires a loan to which an original loan debt is applied to be processed as a new loan. A knowing violation of the provisions regulating pawnbrokers is a crime. This bill would define the term "month" for purposes of these provisions to mean a period of time consisting of 30 consecutive calendar days and would make various conforming changes. The bill would prohibit a pawnbroker from charging or receiving compensation at a rate exceeding 2.5% per month on the unpaid principal balance of any loan and would specify that a pawnbroker may charge or receive compensation in an amount of $3 per month if those other charges or compensation based upon the unpaid principal balance of a loan would be less. The bill would authorize a pawnbroker to impose a charge of $1 on any loan for not more than 3 months which does not exceed $14.99. The bill would make other clarifying changes to these provisions. 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.