General Provisions of the Texas Pawnshop Act

Texas Statutes
Finance Code
Title 4. Regulation Of Interest, Loans, And Financed Transactions
Subtitle C. Pawnshops
Chapter 371. Pawnshops
Subchapter A. General Provisions

•    § 371.001. Short Title
•    § 371.002. Purposes
•    § 371.003. Definitions
•    § 371.004. Computation Of Month
•    § 371.005. Regulatory Authority
•    § 371.006. Rulemaking
•    § 371.007. Staggered Renewal Of Licenses

§ 371.001. Short Title

This chapter shall be known and may be cited as the "Texas Pawnshop Act."

Cite as Tex. Fin. Code § 371.001

§ 371.002. Purposes

The purposes of this chapter are to:
(1)    prevent fraud, unfair practices, discrimination, imposition, and abuse of state residents;
(2)    exercise the state's police power to ensure a sound system of making pawn loans and transfers of personal property by and through pawnshops;
(3)    prevent transactions in stolen property and other unlawful property transactions by licensing and regulating pawnbrokers and pawnshop employees;
(4)    provide for licensing and investigation fees;
(5)    provide minimum capital requirements for pawnbrokers;
(6)    ensure financial responsibility to the state and its residents and compliance with federal, state, and local law, including rules and ordinances; and
(7)    assist local governments in the exercise of their police power.

Cite as Tex. Fin. Code § 371.002

§ 371.003. Definitions

In this chapter:
(1)    "Applicable liabilities" include trade or other accounts payable; accrued sales, income, or other taxes; accrued expenses; and notes or other payables that are unsecured or secured in whole or part by current assets. The term does not include a liability secured by assets other than current assets.
(2)    "Commissioner" means the consumer credit commissioner.
(3)    "Current assets" include an investment made in cash, bank deposits, merchandise inventory, and loans due from customers, excluding the pawn service charge. The term does not include an investment made in:
(A)    fixed assets of real estate, furniture, fixtures, or equipment;
(B)    stocks, bonds, or other securities; or
(C)    prepaid expenses or other general intangibles.
(4)    "Goods" means tangible personal property.
(5)    "Net assets" means the book value of current assets less applicable liabilities.
(6)    "Pawnbroker" means a person engaged in the business of:
(A)    lending money on the security of pledged goods; or
(B)    purchasing goods on condition that the goods may be redeemed or repurchased by the seller for a fixed price within a fixed period.
(7)    "Pawnshop" means a location at which or premises in which a pawnbroker regularly conducts business.
(8)    "Pawn transaction" means the pledging with a pawnbroker of a single item of goods as security for a loan of money.
(9)    "Pledged goods" means goods deposited with or otherwise delivered into the possession of a pawnbroker in connection with a pawn transaction.

Cite as Tex. Fin. Code § 371.003

§ 371.004. Computation Of Month

(a)    For the computation of time in this chapter, a month is the period from a date in a month to the corresponding date in the succeeding month. If the succeeding month does not have a corresponding date, the period ends on the last day of the succeeding month.
(b)    For the computation of a fraction of a month, a day is equal to one-thirtieth of a month.

Cite as Tex. Fin. Code § 371.004

§ 371.005. Regulatory Authority

The legislature has exclusive authority regarding the operation of pawnshops, except for a matter delegated by this chapter to the commissioner. The commissioner has the authority to regulate only a business practice that requires a pawnshop license.

Cite as Tex. Fin. Code § 371.005

§ 371.006. Rulemaking

(a)    The Finance Commission of Texas may adopt rules to enforce this chapter.
(b)    A rule shall be entered in a permanent record book. The book is a public record and shall be kept in the office of the commissioner.
(c)    A copy of a rule shall be mailed to each license holder, and the rule may not take effect before the 21st day after the earliest date on which all of the copies have been mailed.
(d)    On application by any person and on payment of any associated cost, the commissioner shall furnish the person a certified copy of a rule adopted by the Finance Commission of Texas.

Cite as Tex. Fin. Code § 371.006

§ 371.007. Staggered Renewal Of Licenses

(a)    The Finance Commission of Texas by rule may adopt a system under which licenses issued under this chapter expire on various dates during the year.
(b)    For a year in which an expiration date is changed, a license fee payable on the date of issuance shall be prorated according to the number of months during which the license is valid.
(c)    On renewal of a license on the new expiration date, the total license fee is payable.

Cite as Tex. Fin. Code § 371.007