Pawnbrokers: compensation: loans.

Existing law regulates pawnbrokers and sets the maximum compensation charged or received by pawnbrokers on loans to their customers. A knowing violation of the provisions regulating pawnbrokers is a crime. Existing law provides a schedule of maximum charges for 21 loan brackets for the first 3 months of any loan. This bill, in that schedule, would consolidate the 21 loan brackets into 6 and set maximum charges within those brackets. Existing law, among other things, limits the charge for the 4th and subsequent months of a loan to 2.5% per month on the unpaid balance, as specified. This bill would increase the charge limit for the 4th and subsequent months to 3% per month. Existing law permits a loan setup fee of the greater of $5 or 2% of the loan amount, not to exceed $10. This bill would adjust the permitted loan setup fee to the greater of either $5 or 3% of the loan amount, not to exceed $30. Existing law establishes the maximum amount, irrespective of the duration of the loan, that may be charged based on size of pawned articles, as specified, and prohibits a storage charge for any article that can be contained within one cubic foot. This bill would permit a pawnbroker to additionally charge a maximum of $1 for handling and storage of any article that can be contained within one cubic foot. Existing law requires a written contract that provides a 4-month loan period for every loan made by a pawnbroker for which goods are received in pledge as security and, under specified circumstances, requires a pawnbroker to notify the borrower at his or her last known address of the termination of the loan period, by a means for which verification of mailing or delivery of the notification can be provided by the pawnbroker, and provides for extending the right of redemption for a period of 10 days from the date that notice is mailed. This bill instead would require a minimum 4-month loan period and would require the pawnbroker to provide that notification to the pledgor at his or her last known mailing or electronic address, 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, as specified. This bill also would require representatives of the pawnbroker industry to poll their members annually to gather data relating to the current financial condition of the California pawn industry. 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.