As Introduced

129th General Assembly
Regular Session
2011-2012
S. B. No. 262


Senator Daniels 

Cosponsors: Senators Bacon, Coley, Lehner, Balderson, LaRose, Beagle 

A BILL
To amend sections 4727.06, 4727.09, 4727.11, 4727.12, 1
and 4727.13 and to enact sections 4727.061, 2
4727.22, 4727.23, 4727.24, 4727.25, 4727.26, 3
4727.27, 4727.28, 4727.29, and 4727.30 of the 4
Revised Code to make changes to the law regulating 5
pawnbrokers, including additional requirements for 6
the recovery of leased property, extension of the 7
property holding period for military service 8
members and on purchased merchandise, and a 9
requirement that pawnbrokers file a biennial 10
report.11


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1.  That sections 4727.06, 4727.09, 4727.11, 4727.12, 12
and 4727.13 be amended and sections 4727.061, 4727.22, 4727.23, 13
4727.24, 4727.25, 4727.26, 4727.27, 4727.28, 4727.29, and 4727.30 14
of the Revised Code be enacted to read as follows:15

       Sec. 4727.06.  (A) No pawnbroker shall charge, receive, or 16
demand interest for any loan in excess of five per cent per month 17
or fraction of a month on the unpaid principal. Interest shall be 18
computed on a monthly basis on the amount of the principal 19
remaining unpaid on the first day of the month and shall not be 20
compounded.21

       (B) In addition to the rate of interest limitation imposed 22
pursuant to division (A) of this section, the licensee may charge 23
no more than:24

       (1) Four dollars per month or fraction of a month for all 25
pledged articles held as security or stored for a loan, to be 26
agreed to in writing at the time the loan is made;27

       (2) Four dollars plus the actual cost of shipping, when the 28
licensee is to deliver or forward the pledged article by express 29
or parcel post to the pledgor;30

       (3) Two dollars for the loss of the original statement issued 31
to the pledgor by the licensee pursuant to section 4727.07 of the 32
Revised Code upon redemption of the pledged articles;33

       (4) Two dollars for the cost of notifying a pledgor by mail 34
that the pledged articles may be forfeited to the licensee 35
pursuant to section 4727.11 of the Revised Code.36

       (C) A licensee who complies with the requirements or 37
procedures of this state pursuant to the application of the "Brady 38
Handgun Violence Protection Act," 107 Stat. 1536 (1993), 18 39
U.S.C.A. 922, as amended, may charge any fee the licensee is 40
required by law to pay in order to comply with such requirements 41
or procedures. The licensee may charge no more than two dollars 42
for providing services in compliance with such requirements or 43
procedures.44

       (D) A pledgor may pay a portion of the outstanding principal 45
loan balance at any time. A pledgor may redeem a pawn loan at any 46
time after seventy-two hours have passed since the pledge was 47
made. A pledgor may not prepay interest or storage charges, except 48
when the pledgor redeems the pledged property.49

       Sec. 4727.061.  A pawnbroker shall waive any unpaid interest 50
charges imposed under section 4727.06 of the Revised Code and 51
hold, except as provided in sections 4724.12 and 4727.23 to 52
4727.30 of the Revised Code, pledged property that is the subject 53
of a pawn transaction on the pawnbroker's business premises until 54
sixty days after the pledgor or the pledgor's spouse or dependent 55
returns to the United States if the pawnbroker receives a copy of 56
military orders indicating that the pledgor, or pledgor's spouse 57
or dependent, is enlisted in the military service of a state or 58
the United States and, after the pawn transaction was entered 59
into, the person was or is to be deployed abroad for service 60
relating to a military conflict. 61

       Sec. 4727.09.  (A) AFor the purpose of a legitimate 62
investigation of property crime, a person licensed as a pawnbroker 63
shall, every day, furnish the following information to the chief 64
of police of the municipal corporation or township in which the 65
licensee's place of business is located or, if the place of 66
business is not located within a municipal corporation or a 67
township that has a chief of police, to the sheriff of the county 68
in which the place of business is located:69

       (1) A description of all property pledged with or purchased 70
by the licensee;71

       (2) The number of the pawn or purchase form the licensee used 72
to document the pledge or purchase.73

       (B) A licensee shall provide the property description and 74
form number required by division (A) of this section on the form 75
furnishedapproved by the law enforcement officer requesting the 76
informationsuperintendent of financial institutions. The 77
completed form may be communicated by electronic transfer or be in 78
a magneticdigital media format.79

       (C) For the purposes of this section, a licensee need provide 80
only the information required by division (A) of this section.81

       (D) No fee shall be assessed to a licensee, pledgor, or 82
seller for complying with this section.83

       (E) Information furnished to law enforcement by a person 84
licensed as a pawnbroker under this chapter is confidential and is 85
not a public record under section 149.43 of the Revised Code.86

       Sec. 4727.11.  (A) If a pledgor fails to pay interest to a 87
person licensed as a pawnbroker on a pawn loan for two months from 88
the date of the loan or the date on which the last interest 89
payment is due, the licensee shall notify the pledgor by mail or 90
electronically, if the pledgor agrees to such electronic 91
communication at the time the loan is made, with proof of mailing,92
to the last place of address or electronic mail address given by 93
the pledgor, that unless the pledgor redeems the pledged property 94
or pays all interest due and storage charges within thirty days 95
from the date the notice is mailed, the pledged property shall be 96
forfeited to the licensee. If the pledgor fails to redeem or pay 97
all interest due and storage charges within the period specified 98
in the notice, the licensee becomes the owner of the pledged 99
property.100

       (B) In the event that any article or property is redeemed by 101
a person other than the pledgor, the pledgor shall sign the 102
pledgor's copy of the statement required under section 4727.07 of 103
the Revised Code, which copy shall be presented by the person to 104
the licensee. The licensee shall verify the name of the person 105
redeeming the article or property, and shall record the person's 106
name and driver's license number, or other personal identification 107
number, on the licensee's copy of the statement, and shall require 108
the person to sign this copy.109

       (C) In the event that any articles or property pledged are 110
lost or rendered inoperable due to negligence of the licensee, the 111
licensee shall replace the articles or property with identical 112
articles or property, except that if the licensee cannot 113
reasonably obtain identical articles or property, the licensee 114
shall replace the articles or property with like articles or 115
property.116

       (D) When an account is paid in full, the licensee shall 117
return the pledged article immediately to the pledgor. In the 118
event the pledgor sells, transfers, or assigns the pledge, the 119
licensee shall verify the name of the person redeeming the pledge 120
and record that person's name, driver's license number, and 121
signature on the permanent copy of the statement of pledge 122
required pursuant to section 4727.07 of the Revised Code. The 123
licensee also shall obtain the signature of the pledgor, or other 124
person redeeming the pledge, upon a separate record of the 125
transaction, that acknowledges the total dollar amount paid for 126
redemption and the date of redemption. All records shall be kept 127
in the licensee's place of business.128

       Sec. 4727.12. (A) A person licensed as a pawnbroker shall 129
retain any and all goods or articles pledged with the licensee 130
until the expiration of seventy-two hours after the pledge is 131
made, and shall retain any goods or articles purchased by the 132
licensee until the expiration of fifteentwenty-five days after 133
the purchase is made. The licensee may dispose of such goods or 134
articles sooner with the written permission of the chief of police 135
of the municipal corporation or township in which the licensee's 136
place of business is located or, if the place of business is not 137
located within a municipal corporation or township that has a 138
chief of police, with the written permission of the sheriff of the 139
county in which the business is located.140

       (B) If the chief of police or sheriff to whom the licensee 141
makes available the information required by section 4727.09 of the 142
Revised Code has probable cause to believe that the article 143
described therein is stolen property, the chief or sheriff shall 144
notify the licensee in writing. Upon receipt of such a notice, the 145
licensee shall retain the article until the expiration of thirty 146
days after the day on which the licensee is first required to make 147
available the information required by section 4727.09 of the 148
Revised Code, unless the chief or sheriff notifies the licensee in 149
writing that the licensee is not required to retain the article 150
until such expiration.151

       (C) If the chief or sheriff receives a report that property 152
has been stolen and determines the identity of the true owner of 153
the allegedly stolen property that has been purchased or pawned 154
and is held by a licensee, and informs the licensee of the true 155
owner's identity, the licensee may restore the allegedly stolen 156
property to the true owner directly.157

       If a licensee fails to restore the allegedly stolen property, 158
the true owner may recover the property from the licensee in an 159
action at law.160

       (D) If the licensee returns the allegedly stolen property to 161
the true owner, the licensee may charge the person who pledged or 162
sold the allegedly stolen property to the licensee, and any person 163
who acted in consort with the pledgor or the seller to defraud the 164
licensee, the amount the licensee paid or loaned for the allegedly 165
stolen property, plus interest and storage charges provided for in 166
section 4727.06 of the Revised Code.167

       Sec. 4727.13.  (A) The superintendent of financial 168
institutions shall adopt rules in accordance with Chapter 119. of 169
the Revised Code for the administration and enforcement of this 170
chapter. 171

       (B) The superintendent shall enforce this chapter, make all 172
reasonable effort to discover alleged violators, notify the proper 173
prosecuting officer whenever the superintendent has reasonable 174
grounds to believe that a violation has occurred, act as 175
complainant in the prosecution thereof, and aid such officers to 176
the best of the superintendent's ability in such prosecutions. The 177
superintendent shall employ such deputies as may be necessary to 178
make the investigations and inspections, and otherwise perform the 179
duties imposed by such sections.180

       (C) The superintendent may issue a cease and desist order 181
against any person the superintendent reasonably suspects has 182
violated, is currently violating, or is about to violate this 183
chapter. The superintendent may apply to a court of common pleas 184
for an order compelling a person to comply with any cease and 185
desist order or any subpoena issued by the superintendent.186

       (D) The superintendent may obtain from the court of common 187
pleas any form of injunctive relief against any person that has 188
violated, is currently violating, or is about to violate this 189
chapter.190

       (E) To enforce this chapter, the superintendent may issue a 191
subpoena to any person to compel the production of any item, 192
record, or writing, including an electronic writing, and may issue 193
a subpoena to any person to compel the appearance and rendering of 194
testimony.195

       (F) The superintendent may examine and investigate the 196
business, including the business location and any books, records, 197
writings, including electronic writings, safes, files, or storage 198
areas located in or utilized by the business location, of any 199
person the superintendent reasonably suspects to be advertising, 200
transacting, or soliciting business as a pawnbroker. The 201
superintendent may request the attendance and assistance of the 202
appropriate chief of police of a municipal corporation or 203
township, the county sheriff, or the state highway patrol during 204
the examination and investigation of the business.205

       (G) The superintendent may adopt rules that allow for remote 206
examinations of electronic data held by licensees under this 207
chapter.208

       (H) The superintendent shall approve a secure law enforcement 209
database reporting system for use by a licensee to make records 210
available to law enforcement officers as described in division (B) 211
of section 4727.09 of the Revised Code.212

       Sec. 4727.22.  (A) A licensee shall file a biennial report 213
with the superintendent of financial institutions before the first 214
day of March of the filing year disclosing all relevant pawn 215
transaction activity occurring during the previous two calendar 216
years. A licensee who receives an initial license during an 217
even-numbered year shall file the biennial report each 218
even-numbered year. A licensee who receives an initial license 219
during an odd-numbered year shall file the biennial report each 220
odd-numbered year. A biennial report is delinquent if the licensee 221
does not file the report before the first day of April of the 222
licensee's filing year.223

       (B) The biennial report must provide all of the following:224

       (1) The number of pawn transactions made by the licensee 225
during the previous calendar year and the aggregate amount 226
financed on the pawn transactions; 227

       (2) The number of pledged property items redeemed during the 228
previous calendar year and the amount financed on the redeemed 229
property; 230

       (3) The number of items surrendered to law enforcement; 231

       (4) The total dollar amount of pawn loans surrendered to law 232
enforcement; 233

       (5) The number of pawn loans that were not redeemed; 234

       (6) The total dollar amount of pawn loans not redeemed; 235

       (7) The total number of full-time equivalent employees at the 236
pawnshop as of the last day of December of the preceding year.237

       (C) Information furnished to the superintendent in accordance 238
with this section is confidential and is not a public record under 239
section 149.43 of the Revised Code.240

       Sec. 4727.23.  (A) When a law enforcement officer has 241
reasonable suspicion that property in the possession of a 242
pawnbroker at a pawnshop in the law enforcement officer's 243
jurisdiction has been misappropriated, the law enforcement officer 244
may issue a police hold order that directs the pawnbroker not to 245
release or dispose of the property until the police hold order 246
terminates or a court orders the release or disposal of the 247
property. The law enforcement officer shall request the pawnbroker 248
or the pawnbroker's designee to sign the police hold order.249

       (B) If a pawnbroker or pawnbroker's designee signs the police 250
hold order described in division (A) of this section, the hold 251
order takes effect when the pawnbroker or the pawnbroker's 252
designee receives the police hold order.253

       (C) If a pawnbroker or pawnbroker's designee refuses to sign 254
the police hold order described in division (A) of this section, 255
the hold order begins when the refusal occurs. 256

       Sec. 4727.24.  (A) When property in the possession of a 257
pawnbroker may be needed as evidence in a pending court action 258
involving a criminal or civil charge, a law enforcement agency may 259
issue an evidentiary hold order to a pawnbroker that directs the 260
pawnbroker not to release or dispose of the property until the 261
evidentiary hold order terminates or a court orders the release or 262
disposal of the property. 263

       (B) A pawnbroker who receives an evidentiary hold order under 264
division (A) of this section shall hold the property until the 265
court notifies the pawnbroker in writing of the disposition of the 266
action. The court shall notify the pawnbroker within fifteen days 267
after the disposition of the action for which the property may be 268
needed as evidence. 269

       Sec. 4727.25.  (A) A hold order described in section 4727.23 270
or 4727.24 of the Revised Code shall be in writing and contain all 271
of the following: 272

       (1) The name of the pawnbroker; 273

       (2) A complete description of the property being held, 274
including the model number and serial number, if any; 275

       (3) The mailing address of the pawnshop where the property is 276
being held.277

       (B) In addition to the information required by division (A) 278
of this section, if the hold order is a police hold order as 279
described in section 4727.23 of the Revised Code, the order must 280
contain all of the following: 281

       (1) The name, title, and identification number of the law 282
enforcement officer issuing the police hold order, and the name 283
and address of the law enforcement agency for which the law 284
enforcement officer is acting; 285

       (2) The number, if any, assigned by the law enforcement 286
agency to the case; 287

       (3) The expiration date of the hold order. 288

       (C) In addition to the information required by division (A) 289
of this section, if the hold order is an evidentiary hold order as 290
described in section 4727.24 of the Revised Code, the order must 291
contain both of the following:292

       (1) The name and address of the law enforcement agency 293
issuing the evidentiary hold order; 294

       (2) The number and caption of the court action. 295

       Sec. 4727.26.  (A) An initial police hold order as described 296
in section 4727.23 of the Revised Code may not exceed sixty days. 297
However, a law enforcement officer may extend the police hold 298
order for one additional successive sixty-day period by giving 299
written notification to the pawnbroker before the expiration of 300
the first sixty-day period. 301

       (B) A law enforcement agency may not issue a new police hold 302
order for the same property after the additional sixty-day period 303
allowed under this section. However, the termination of the police 304
hold order does not affect an existing evidentiary hold order as 305
described in section 4727.24 of the Revised Code on the same 306
property or prevent the issuance of an evidentiary hold order for 307
the same property. 308

       (C) A law enforcement agency may release a police hold order 309
before the end of a sixty-day period by issuing a written release 310
to the pawnbroker. 311

       Sec. 4727.27.  (A) If a person believes that property in the 312
possession of a pawnbroker was misappropriated from the person, 313
and if the person wants to obtain possession of the property from 314
the pawnbroker, the person shall notify the pawnbroker in writing.315

       (B) A notice under division (A) of this section must contain 316
a complete and accurate description of the property and must be 317
accompanied by proof that the claimant owns the property and, if 318
the claimant alleges that the property was stolen, a legible copy 319
of a law enforcement agency's report indicating that the property 320
was stolen. 321

       (C) Except as provided in section 4727.28 of the Revised 322
Code, a pawnbroker shall not, for thirty days after the pawnbroker 323
receives notice of a claim under this section, dispose of property 324
that is the subject of a claim. 325

       Sec. 4727.28.  If a claimant and a pawnbroker do not resolve 326
a claim within ten days after the pawnbroker's receipt of a notice 327
of the claim under section 4727.27 of the Revised Code, the 328
claimant may bring an action in court to require the pawnbroker to 329
return the property to the claimant. After a pawnbroker is 330
notified that court action has been filed, the pawnbroker may not 331
dispose of the property until the court disposes of the action, 332
disposes of the property, or allows the pawnbroker to dispose of 333
the property. 334

       Sec. 4727.29.  A pledgor or seller of property to a 335
pawnbroker is liable to the pawnbroker for the full amount that 336
the pledgor or seller received from the pawnbroker, all charges 337
owed by the pledgor for the pawnbroker transaction, and attorney's 338
fees and other costs as allowed by the rules of court if, in an 339
action brought under section 4727.28 of the Revised Code, the 340
court determines that the pledgor or seller misappropriated the 341
property from the claimant and the court orders the pawnbroker to 342
return the property to the claimant.343

       Sec. 4727.30.  (A) If property in the possession of a 344
pawnbroker was leased from a lessor to a pledgor or seller when 345
the pledgor or seller pledged or sold the property to the 346
pawnbroker, but the property did not have a permanent label or 347
other conspicuous mark identifying it as the lessor's property, 348
the pawnbroker may return the property to the lessor if the lessor 349
does both of the following: 350

       (1) Provides the pawnbroker with evidence that the property 351
is the lessor's property and was leased to the pledgor or seller 352
at the time the property was pledged or sold to the pawnbroker; 353

       (2) Pays the pawnbroker either of the following: 354

       (a) The amount financed and the finance fee for the pawn 355
transaction, if the property was pledged to the pawnbroker; 356

       (b) The amount that the pawnbroker paid the seller if the 357
property was sold to the pawnbroker. 358

       (B) A pawnbroker is not liable to the pledgor or seller of 359
property that is recovered by a lessor under division (A) of this 360
section for returning the property to a lessor. 361

       Section 2.  That existing sections 4727.06, 4727.09, 4727.11, 362
4727.12, and 4727.13 of the Revised Code are hereby repealed.363