Chapter 5 · Business Regulations

Article 10. Pawnbrokers and Precious Metal Dealers

Sections 5-1001 to 5-1016 · 16 sections

5-1001 Definition.

As used in this article, the following definitions shall apply:

(a)Pawnbroker — means any person who loans money on deposit or pledge of personal property or other valuable thing, other than intangible personal property or who deals in the purchase of personal property on the condition of selling the same back again at a stipulated price.

(1)Pawnbroker does not include any person operating under the supervision of the state banking commissioner, credit union administrator or the consumer credit commissioner of this state.

(b)Person — means any individual, firm, company, partnership, corporation or association or other entity.

(c)Precious Metal — means gold, silver or platinum group metals or any used articles or other used personal property containing such metals, but shall not include coins purchased for their numismatic value rather than their metal content or ingots or other industrial residue or by-products composed of such metals purchased from manufacturing firms.

(d)Precious Metal Dealer — means any person who engages in the business of purchasing precious metal for the purpose of reselling such metal in any form.

(Ord. 604, Sec. 1; Code 2003)

5-1002 Licensure; application; fee.

(a)No person shall engage or continue in business as a pawnbroker or precious metal dealer without first obtaining a license therefor. If the person’s place of business is inside the corporate limits of the city, the person shall obtain such license from the clerk.

(b)Application for a license shall be in writing and shall state the full name and place of the residence of the applicant. If the applicant is a partnership, the application shall contain the name and place of residence of each member thereof or, if a corporation or association, of each officer, shareholder or member thereof. The application shall include the address of the places where the business is to be conducted, the hours and days of the week during which the applicant proposes to engage in the business of pawnbroking or dealing in precious metals at each such place, and such other information as may be deemed necessary to determine the applicant’s qualifications for a license in accordance with the provisions of this article. Each applicant also shall submit with the application:

(1)A statement that the applicant is the holder of a valid registration certificate issued by the director of revenue pursuant to K.S.A. 79-3608 for each place of business for which application for a license is made; and

(2)A detailed inventory and description of all goods, wares, merchandise, precious metals or other property held in pledge for sale at the time of the application at each place of business stated therein, indicating whether the same was received in pledge, purchased as secondhand merchandise or precious metal purchased for resale.

(c)The license application shall be in a form approved by the attorney general. Each application shall be accompanied by a fee as set out in Chapter 17, and will expire December 31st of each year regardless of when the license was issued. All such fees received by the city clerk shall be deposited in the city general fund.

(Ord 604, Sec. 2; Code 2003)

5-1003 Same; qualifications.

No license or any renewal thereof shall be granted to:

(a)Any person who is not a citizen of the United States;

(b)Any person who has not been an actual resident of the state of Kansas for at least two (2) years immediately preceding the date of application;

(c)Any person who has been convicted of or has pleaded guilty to a felony under the laws of this state, or any other state, or of the United States, or shall have forfeited that person’s bond to appear in court to answer charges for any such offense within the ten (10) years immediately prior to such person’s application for a license;

(d)Any person who has had his license revoked for cause under the provisions of this article;

(e)Any person who is not at least twenty-one (21) years of age;

(f)Any person who at the time of application for renewal of any license issued hereunder would not be eligible for such license upon a first application;

(g)Any person who does not own the premises for which a license is sought, unless that person has a written lease therefor for at least three-fourths (¾) of the period for which the license is to be issued;

(h)Any person whose spouse would be ineligible to receive a license hereunder for any reason other than the age, citizenship and residence requirements;

(i)Any partnership, unless all of the partners shall be eligible to receive a license as an individual; and

(j)A corporation, if any officer, manager, director or stockholder would be ineligible to receive a license as an individual.

(Ord 604, Sec. 3; Code 2003)

5-1004 Transfer of stock by stockholder of corporate licensee; effect.

It shall be unlawful for any shareholder of a corporate licensee to transfer any stock in said corporation to any person who would be ineligible to receive a license as an individual, any such transfer shall be null and void: provided, that if any such stockholder of a corporate licensee shall become deceased, and that person’s heirs or devisees to whom said stock descends by descent and distribution or by will shall be ineligible to receive a license hereunder, then the legal representatives of said deceased stockholder’s estate, that person’s heirs and devisees shall have fourteen (14) months from the date of the death of said stockholder within which to sell said stock to a person eligible to receive a license hereunder, with such sale to be made in accordance with the provisions of the probate code and any amendments thereto. If said legal representatives, heirs and devisees shall fail, refuse or neglect to so convey said stock within the time hereinbefore prescribed, then said stock shall revert to and become the property of the corporation, for which the corporation shall pay to said legal representatives, heirs or devisees the book value of such stock. If the stock in any corporation shall be the subject of any trust heretofore or hereafter created, the trustee or trustees and the beneficiaries of each trustee and beneficiary of said trust who is twenty-one (21) years of age or older must be a person who would be eligible to receive a license, or the trustee shall be and that person is hereby authorized and required, within fourteen (14) months after the effective date of the trust, to sell said stock to a person eligible to receive a license under this article, and that person shall hold and disburse the proceeds thereof in accordance with the terms of the trust, or the license of the corporation shall be forfeited.

During the fourteen-month (14) periods hereinbefore mentioned, a corporation shall not be denied a license or have its license revoked if it meets all of the other requirements necessary to have a license as provided in this article.

(Ord. 604, Sec. 4; Code 2003)

5-1005 License; contents; display; license for each place of business.

The document or other instrument evidencing the license of a pawnbroker or precious metal dealer shall state the address at which the business is to be conducted and shall state fully the name of the licensee. If the licensee is a partnership, the license shall state the names of the members thereof and, if a corporation, the date and place of its incorporation and the names of all shareholders thereof. Such license shall be kept conspicuously posted in the place of business of the licensee and shall not be transferable or assignable. Not more than one place of business shall be maintained under the same license, but more than one license may be issued to the same licensee upon compliance with all provisions of this article governing the issuance of an initial license.

(Ord. 604, Sec. 5; Code 2003)

5-1006 Change in location of place of business; notice; duplicate license; restrictions.

Whenever a licensee shall change that person’s place of business to another location within the same political subdivision by which that person is licensed, that person immediately shall give written notice thereof to the clerk of such subdivision who then shall issue a duplicate license which shall show, in addition to all of the information appearing on the old license, a record of the change of location and the date thereof, which new license shall be authority for the operation of such business under such license at such location. The licensee shall return the old license to the appropriate clerk as soon as the new license has been received and the change in location has taken place. No change in the place of business of a licensee to a location outside of the licensing subdivision shall be permitted under the same license.

(Ord. 604, Sec. 6; Code 2003)

5-1007 Examination of books, accounts, records.

Each licensee shall keep and use in the licensee’s business such books, accounts and records as will enable the city or county issuing the licensee’s license to determine whether such licensee is complying with the provisions of this article. Any such city or county may examine or cause to be examined the books, accounts, records and files used by any licensee or by any other person engaged in the business of pawnbroking or dealing in precious metals, irrespective of whether such person acts or claims to act as principal, designee or broker, or under or without authority of this article.

(Ord. 604, Sec. 7; Code 2003)

5-1008 Suspension or revocation of license; notice and hearing.

Any license issued under this article may be suspended or revoked, after due notice and public hearing, if the licensee:

(a)Has failed to pay the annual license fee;

(b)Has violated any provision of this article; or

(c)Has been convicted of or has pleaded guilty to a felony under the laws of this state, or any other state, or of the United States, or shall have forfeited that person’s bond to appear in court to answer charges for any such offense, if such conviction or plea occurred subsequent to or within ten (10) years immediately prior to the date of the licensee’s application for the license.

Any license issued under this article shall be revoked, after due notice and hearing thereon, if it shall be proved at the hearing that the licensee sold any handgun to a minor.

Said hearing herein provided shall be held within thirty (30) days after notice thereof, and the alleged violation determined by written order of the city issuing the license within sixty (60) days after such hearing is concluded; but no revocation or suspension or surrender of any license shall impair or affect the obligation of any preexisting lawful contract between the licensee and any borrower.

(Ord. 604, Sec. 8; Code 2003)

5-1009 Loans secured by pledged goods; written contract required, contents; retention, disposition and redemption of pledged articles.

Every loan made by a pawnbroker for which goods are received in pledge as security shall be evidenced by a written contract, in ink, a copy of which shall be furnished to the borrower. The loan contract shall set forth the loan period, which shall be one (1) month, the date on which the loan is due and payable and the charges, and it shall clearly inform the borrower of his/her right to redeem the pledge during the redemption period of two (2) months after due date. Except as otherwise provided herein, the holder of any such contract shall be presumed to be the person entitled to redeem the pledge, and the pawnbroker shall deliver the pledge to the person presenting the contract, upon payment of the principal and charges.

Every pawnbroker shall retain in that person’s possession, after the date on which the loan became due and payable, every article pledged to him for a redemption period of two (2) months. During such period, the borrower may redeem the pledged articles, upon payment of the principal and charges. It shall be unlawful for any pawnbroker to sell or transfer title or possession of any pledged property until the expiration of such period of redemption.

If any pledged article is not redeemed within such redemption period, the pawnbroker shall become vested with all right, title and interest of the pledgor, and that person assigns, to such pledged article, to hold and dispose of as that person’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.

(Ord. 604, Sec. 9; Code 2003)

5-1010 Report of property pledged or purchased; required holding period for precious metal purchased; report not open to public inspection.

On or before Tuesday of each week, or at more frequent intervals if required by city ordinance, every pawnbroker or precious metal dealer shall report the description of all property received in pledge or purchased as a pawnbroker or precious metal dealer during the preceding calendar week, in whatever quantity received. Such report shall include all property purchased as secondhand merchandise at wholesale, secondhand merchandise taken in for sale or possessed on consignment for sale and secondhand merchandise taken in trade. No such report need be made concerning property or merchandise acquired from another pawnbroker or precious metal dealer licensed in this state in transaction involving the purchase or other acquisition from the other pawnbroker or precious metal dealer of the other pawnbroker’s or dealer’s stock in trade, or a substantial part thereof in bulk, where the other pawnbroker has made the reports required by this section with respect to such property or merchandise.

(b)If a transaction required to be reported under this section takes place within the territorial limits of the city, the report shall be submitted to the chief of police.

(c)All reports made pursuant to this section shall comply with and be submitted in accordance with the terms of any applicable city ordinances or requiring such reporting.

(d)Every precious metal dealer shall retain in the dealer’s possession for a period of ten (10) days all precious metal purchased as a precious metal dealer, and such metal shall remain in the condition in which it was purchased. The ten-day period shall commence on the date that the appropriate police chief receives the report of its acquisition in compliance with this section. If the police chief has probable cause to believe that any precious metal reported by a dealer has been stolen, the police chief may give written notice to the dealer to retain such metal for an additional period of fifteen (15) days. Upon such notice, the dealer shall retain such metal in an unaltered condition for the additional fifteen (15) day period unless the police chief notifies the dealer in writing the waiting period is terminated at an earlier time.

(e)Reports made pursuant to this section shall be available for inspection only by law enforcement officers and city and district attorneys and their employees, for law enforcement purposes.

(Ord. 604, Sec. 10; Code 2003)

5-1011 Record of transactions.

(a)At the time of making a loan, a pawnbroker shall enter in a book kept for that purpose:

(1)The date, duration, amount and charges of every loan made by the pawnbroker;

(2)A full and accurate description of the property pledged; and

(3)The name, age, residence and driver’s license or other personal identification number of the pledgor.

(b)At the time of purchasing precious metal, a precious metal dealer shall enter in a book kept for that purpose:

(1)The date of the purchase;

(2)A full and accurate description of each item purchased, including any identifying letters, numbers or marks on an item; and

(3)The name, age, residence and driver’s license or other personal identification number of the seller.

(c)The record required by this section shall be maintained by the pawnbroker or precious metal dealer at the pawnbroker’s or dealer’s place of business for not less than one year following the date of transaction.

(Ord. 604, Sec. 11; Code 2003)

5-1012 Minors; prohibited transactions.

(a)No pawnbroker shall receive in pledge, or as security for any loan, transfer, service, undertaking or advantage, anything of value from any person under the age of eighteen (18) years.

(b)No precious metal dealer shall purchase any precious metal from any person under the age of eighteen (18) years.

(Ord. 604, Sec. 12; Code 2003)

5-1013 Periodic inspections to determine compliance with article.

Law enforcement officers of the city have access during regular business hours to the place of business of any pawnbroker or precious metal dealer conducting business in the city. Access shall be for the purpose of periodically inspecting property pledged or purchased in the transaction of the business of the pawnbroker or precious metal dealer, and records relating to those transactions, to determine if the pawnbroker or dealer is complying with the provisions of this article.

(Ord. 604, Sec. 13; Code 2003)

5-1014 Interest and charges on pawnbroker transactions; applicability of other laws; maximum charges; term of loans.

(a)On and after July 1, 1972, no pawnbroker shall contract for, charge, or receive directly or indirectly on or in connection with any pawnbroker transaction any charges, whether for interest, storage, insurance, service fee, handling, compensation, consideration or expense which in the aggregate are greater than the charges provided and authorized by this article. Any other provisions of law relating to interest, storage and such charges shall not be applicable to any pawnbroker transaction made in accordance with this article.

(b)Whenever any loan is made by a pawnbroker for which goods are received in pledge, the following maximum amounts may be charged:

(1)On any amount a charge may be added in an amount not to exceed ten percent (10%) per month or one hundred twenty percent (120%) per annum of the amount advanced to the borrower; and

(2)The maximum amount of a loan authorized by this article shall not exceed $300 per transaction.

(c)The term of any loan made under the provisions of this article shall be one (1) month. Loans may be extended or renewed by the payment of the charges herein provided monthly. The charges authorized herein shall be deemed to be earned at the time the loan is made and shall not be subject to refund. On loans under this article, no insurance charges or any other charges of any nature whatsoever shall be permitted.

(Ord. 604, Sec. 14; Code 2003)

5-1015 Transactions in precious metals, requirements; refusal to redeliver stolen property to owner, effect.

(a)A precious metal dealer shall require every person from whom the dealer purchases precious metal for resale:

(1)Proof of identification; and

(2)A signed statement saying that the seller is the legal owner of the precious metal or is a designee of the legal owner who is authorized to sell such metal and stating when, where and in what manner such metal was acquired by the seller.

(b)When converted or stolen property has been pawned or sold to a precious metal dealer and the pawnbroker or dealer refuses to redeliver such property to the rightful owner upon demand and presentation of a bill of sale or other proper evidence of ownership by the owner, and legal action by the rightful owner to recover the property becomes necessary, the court may assess the pawnbroker or dealer for reasonable attorney’s fees incurred by the rightful owner if the court finds that the pawnbroker or dealer wrongfully withheld the converted or stolen property.

(Ord. 604, Sec. 15; Code 2003)

5-1016 Prosecution of violations.

Whenever that person has reason to believe a violation of this article has occurred, the city attorney or any of that person’s deputies shall prosecute every case to final judgment in the city wherein the alleged offense was committed.

(Ord. 604, Sec. 16; Code 2003)