Pawnbrokers; Regulations in Michigan

Chapter 446. Business Regulations
Pawnbrokers (Refs & Annos)
446.201. License requirements; effect of licensure under other acts; exemptions; internet drop-off stores
446.202. Grant of license; restriction on location of conduct of business; term and transferability of license; license fees; bond; restrictions on licensing authority of governmental units
446.203. Definitions
446.204. Action on pawnbroker's bond
446.205. Records of property received and transactions; contents and form; examination; disposition
446.206. Reporting to chief law enforcement officer of daily transactions
446.208. Memorandum or note regarding pawn or pledge of article; delivery and contents
446.209. Interest on loans; fees
446.210. Vesting of title to item pledged or pawned; time
446.211. Reinvestment of title and right to possession of pledged property in pawner; agreement for maintenance of possession and use of property by pawner during term of pawn or pledge transaction; recovery of property by pawnbroker
446.213. Defacement, etc., of property received by pawnbroker; acceptance by pawnbroker of property customarily bearing manufacturer's serial number or other identifying insignia
446.214. Pawned property; acceptance from posted person or minor unlawful
446.216. Bond of complainant; amount, surety
446.217. Transaction of business on Sunday unlawful
446.218. Violation; penalty
446.219. Violation; revocation of license and forfeiture of fee

446.201. License requirements; effect of licensure under other acts; exemptions; internet drop-off stores

Sec. 1. (1) A person, corporation, or firm shall not conduct business as a pawnbroker in any of the governmental units of this state without having first obtained from the chief executive officer of that governmental unit a license under this act that authorizes that person, corporation, or firm to conduct that business. This subsection does not require an internet drop- off store complying with subsection (3), or a person engaged in the sale, purchase, consignment, or trade of personal property or other valuable thing for himself or herself, to obtain a license under this act.
(2) Licensure under either or both of the following acts does not exempt a person from obtaining a license under this act:

(a) The precious metal and gem dealer act, 1981 PA 95, MCL 445.481 to 445.492.
(b) 1917 PA 350, MCL 445.401 to 445.408.

(3) An internet drop-off store in compliance with the following conditions is exempt from licensure as a pawnbroker under this act:

(a) Has a fixed place of business within this state except that he or she exclusively transacts all purchases or sales by means of the internet and the purchases and sales are not physically transacted on the premises of that fixed place of business.
(b) Has the personal property or other valuable thing available on a website for viewing by photograph, if available, by the general public at no charge, which website shall be searchable by zip code or state, or both. The website viewing shall include, as applicable, serial number, make, model, and other unique identifying marks, numbers, names, or letters appearing on the personal property or other valuable thing.
(c) Maintains records of the sale, purchase, consignment, or trade of the personal property or other valuable thing for at least 2 years, which records shall contain a description, including a photograph, if available, and, if applicable, serial number, make, model, and other unique identifying marks, numbers, names, or letters appearing on the personal property or other valuable thing.
(d) Provide the local police agency with any name under which it conducts business on the website and access to the business premises at any time during normal business hours for purposes of inspection.
(e) Within 24 hours after a request from a local police agency, provide an electronic copy of the seller's or consignor's name, address, telephone number, driver license number and issuing state, the buyer's name and address, if applicable, and a description of the personal property or other valuable thing as described in subdivision (c). The provision of information shall be in a format acceptable to the local police agency but shall at least be in a legible format and in the English language.
(f) Provide that payment for the personal property or other valuable thing is executed by means of check or other electronic payment system, so long as the payment is not made in cash. No payment shall be provided to the seller until the item is sold.
(g) Immediately remove the personal property or other valuable thing from the website if the local police agency determines that the personal property or other valuable thing is stolen.

446.202. Grant of license; restriction on location of conduct of business; term and transferability of license; license fees; bond; restrictions on licensing authority of governmental units
Sec. 2. (1) The chief executive officer of the governmental unit may grant under his or her hand, and the official seal of his or her office, to any suitable person, corporation, or firm a license authorizing that person, corporation, or firm to conduct the business of a pawnbroker subject to the provisions of this act.
(2) The license shall designate the particular place in the governmental unit where that person, corporation, or firm shall conduct the business. A person, corporation, or firm receiving a license shall not conduct the business in any other place than the place designated in the license.
(3) The term of license is 1 year from date of issuance, unless revoked for cause, and is not transferable.
(4) Before issuance of the license, the applicant shall pay to the treasurer of the governmental unit an annual license fee in the amount determined under subsection (5) and give a bond to the governmental unit in its corporate name, in the penal sum of $3,000.00, with at least 2 sureties, conditioned for the faithful performance of the duties and obligations pertaining to the conduct of the business and for the payment of all costs and damages incurred by any violation of this act. The governmental unit shall approve the bond.
(5) The governmental unit may fix the amount to be paid as the annual license fee at any amount not less than $50.00 or more than $ 500.00.
(6) Notwithstanding any other provision of this section, the authority of a governmental unit to issue a license under this act is limited as follows:
(a) A county may not issue a license for a location within a city or village with a population greater than 3,000.
(b) A county may not issue a license for a location within a city or village with a population of 3,000 or less or within a township or charter township if that city, village, township, or charter township has established the license fee pursuant to subsection (5).
(c) A township or charter township may not issue a license for a location within a village with a population over 3,000 or a village with a population of 3,000 or less that has established a fee under subsection (5).

446.203. Definitions

Sec. 3. As used in this act:

(a) “Chief executive officer” means any of the following:
(i) For a city, the mayor.
(ii) For a village, the village president.
(iii) For a township or charter township, the township supervisor.
(iv) For a county, the county executive or, if there is no county executive, the person designated by a resolution of the county board of commissioners.
(b) “Governmental unit” means a city, township, charter township, county, or incorporated village.
(c) “Internet drop-off store” means a person, corporation, or firm that contracts with other persons, corporations, or firms to offer its personal property or other valuable thing for sale, purchase, consignment, or trade through means of an internet website and meets the conditions described in section 1(3). 1
(d) “Local police agency” means the police agency of the city, village, or township, or if none, the county sheriff of the county in which the internet drop-off store conducts business.
(e) “Pawnbroker” means a person, corporation, or member, or members of a copartnership or firm, who loans money on deposit, or pledge of personal property, or other valuable thing, other than securities or printed evidence of indebtedness, or who deals in the purchasing of personal property or other valuable thing on condition of selling the same back again at a stipulated price.

446.204. Action on pawnbroker's bond

Sec. 4. If any person shall be aggrieved by the conduct of any such licensed pawnbroker, and shall recover judgment against him therefor, such person may, after the return unsatisfied, either in whole or in part, of any execution issued upon said judgment, maintain an action in his own name upon the bond of the said pawnbroker in any court having jurisdiction of the amount of said judgment remaining unsatisfied.

446.205. Records of property received and transactions; contents and form; examination; disposition

Sec. 5. (1) A pawnbroker shall keep a record in English, at the time the pawnbroker receives any article of personal property or other valuable thing by way of pawn, that includes a description of the article, a sequential transaction number, any amount of money loaned on the article, the name, residence, general description, and driver license number, official state personal identification card number, or government identification number of the person from whom the article was received, and the day and hour when the article was received. The record, the place where the business is carried on, and all articles of property in that place of business are subject to examination at any time by the attorney of the governmental unit, local police agency, the county prosecuting attorney of the county in which the governmental unit is situated, or the department of state police.
(2) Upon the receipt of any article of personal property or other valuable thing by way of pawn, the pawnbroker shall make a permanent record of the transaction on a form provided by the pawnbroker that substantially complies with the form described in subsection (4). Each record of transaction shall be completed in duplicate by the pawnbroker, legibly in the English language, and shall contain all applicable information required to complete the record of transaction form under subsection (4). This subsection does not prohibit the use and transmission of the information required in the record of the transaction by means of computer or other electronic media as permitted by the local police agency within the applicable governmental unit.
(3) The pawnbroker shall retain a record of each transaction and, within 48 hours after the property is received, shall send 1 copy of the record of transaction to the local police agency.
(4) The record of transaction form shall be 8-1/2 inches by 11 inches in size and shall be as follows:
 

446.206. Reporting to chief law enforcement officer of daily transactions

Sec. 6. A pawnbroker shall make daily, except Sunday, a sworn statement of his or her transactions, describing the articles received, and setting forth the name, residence, and description of the person from whom the articles were received, to the chief of police or chief law enforcement officer of the governmental unit.

446.208. Memorandum or note regarding pawn or pledge of article; delivery and contents

Sec. 8. A pawnbroker, at the time of a loan, shall deliver to the person pawning or pledging any article a memorandum or note signed by him or her, containing the substance of the entry required to be made by him or her in his or her book by section 6.1 A charge shall not be made or received by the pawnbroker for the entry, memorandum, or note. The memorandum or note shall be consecutively numbered and upon its back shall be printed in English in 12-point type the following: “If interest or charges in excess of 3% per month, plus storage charges provided in this document, are asked or received, this loan is void and of no effect; and the borrower cannot be made to pay back the money loaned, any interest on the loan, or any charges or any part of the charges, and the pawnbroker loses all right to the possession of the goods, article, or thing pawned, and shall surrender the item to the borrower or pawner upon due demand for the item.”.

446.209. Interest on loans; fees

Sec. 9. (1) A licensed pawnbroker may charge upon any loan a rate of interest not to exceed 3% per month and is not required to accept any interest less than 50 cents on a single loan. A pawnbroker may also charge $1.00 per month or fraction of a month for the storage of unencumbered personal property under any single pledge or pawn.
(2) A pawnbroker may charge $1.00 per month or fraction of a month for a usage fee for unencumbered personal property pawned or pledged and used by the pawner during the term of the pawn or pledge. A usage fee charged under this subsection is not considered interest.
(3) A pawnbroker or the pawnbroker's agent or employee shall not charge or receive interest on the loan in excess of the amounts provided for in this act.
(4) Interest on any loan is not payable in advance and shall be computed on unpaid monthly balances without compounding.
(5) A pawnbroker is not entitled to any examination fee and shall not make any charge in excess of the amounts provided for in this act.

446.210. Vesting of title to item pledged or pawned; time

Sec. 10. (1) Title to the item pledged or pawned vests in the pawnbroker upon the expiration of 3 months or of any period beyond 3 months agreed upon by the parties if the borrower has not paid the debt, interest, and charges on the item pledged or pawned.
(2) A pawnbroker shall not sell any pawn or pledge until the item has remained in his or her possession for at least 3 months.

446.211. Reinvestment of title and right to possession of pledged property in pawner; agreement for maintenance of possession and use of property by pawner during term of pawn or pledge transaction; recovery of property by pawnbroker
Sec. 11. (1) If at any time before the sale of the item pledged or pawned the borrower pays or tenders to the pawnbroker the debt and interest and charges on the item, that payment or tender reinvests the pawner with the title and right of possession to the property pledged.
(2) A pawnbroker may agree in writing, after pledged or pawned unencumbered personal property has been deposited with the pawnbroker, to allow the pawner to maintain possession and use of the pledged or pawned unencumbered personal property during the term of the pawn or pledge transaction. The agreement may also include the payment of a usage fee under section 9. 1 A pawnbroker may take possession of the pledged or pawned property pursuant to section 9609 of the uniform commercial code, 1962 PA 174, MCL 440.9609.

446.213. Defacement, etc., of property received by pawnbroker; acceptance by pawnbroker of property customarily bearing manufacturer's serial number or other identifying insignia
Sec. 13. (1) A pawnbroker shall not deface, scratch, obliterate, melt, separate, or break into parts any article or thing received by him or her in pawn, or otherwise or in any manner do, cause, or suffer to be done by others, anything that destroys or tends to destroy the identity of the article or thing, or tends to render the identification of the thing or article more difficult.
(2) A pawnbroker shall not accept by way of pledge, pawn, purchase, or exchange any article or thing that customarily bears a manufacturer's serial number or other identifying insignia unless the number or insignia is plainly visible on the article or thing.

446.214. Pawned property; acceptance from posted person or minor unlawful

Sec. 14. A pawnbroker shall not receive for pawn any article from any person under 18 years of age or a person the pawnbroker suspects as having stolen the article to be pawned.

446.216. Bond of complainant; amount, surety

Sec. 16. The said bond shall be in double the value of the property claimed, with such surety as such court shall approve, and shall be given to the person from whose possession the property was taken, with condition that the obliger so claiming the same will pay all the costs and damages that may be recovered against him by the obligee in any suit brought within 10 days from the date of such bond.

446.217. Transaction of business on Sunday unlawful

Sec. 17. No license granted under the provisions of this act shall authorize any business to be transacted by pawnbrokers on the first day of the week commonly called Sunday.

446.218. Violation; penalty

Sec. 18. Any person who shall violate any of the provisions of this act, whether as owner, or as clerk, agent, servant or employe, shall be guilty of a misdemeanor and upon conviction thereof in any court of competent jurisdiction be fined not less than 25 dollars nor more than 100 dollars, or by imprisonment in the county jail not less than 10 days nor more than 3 months, or by both such fine and imprisonment in the discretion of the court.

446.219. Violation; revocation of license and forfeiture of fee

Sec. 19. Upon a conviction of any person conducting business as a pawnbroker under this act, or on conviction of any clerk, agent, servant, or employee of the person, the chief executive officer of the governmental unit shall revoke the license of the person and no part of the license fee shall be returned to him or her. The governmental unit shall not issue a license as a pawnbroker to that person for the period of 1 year from the date of the revocation.

Mich. Comp. Laws Ann. §§ 446.201 - 446.219 (Repea