Texas Pawnshop Operation Laws

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

§ 371.151. Hours Of Operation

(a)    A pawnbroker shall maintain normal business hours of at least four hours a day for five days a week.
(b)    A pawnbroker may not do business before 7 a.m. or after 9 p.m.

Cite as Tex. Fin. Code § 371.151

§ 371.152. Recordkeeping

(a)    A pawnbroker, consistent with accepted accounting practices, shall keep adequate books and records relating to the pawnbroker's pawn transactions and any other business regulated by this chapter.
(b)    Books and records shall be preserved at least until the second anniversary of the date of the last transaction recorded.

Cite as Tex. Fin. Code § 371.152

§ 371.153. Notice Of Operation Of Other Business

(a)    A pawnbroker shall notify the commissioner before the pawnbroker allows another person to conduct at the pawnshop a business other than the business of a pawnbroker or the business of buying and selling goods.
(b)    The commissioner may refuse to permit a person other than the pawnbroker to operate the other business on the pawnshop premises if the commissioner finds that the operation is inconsistent with this chapter.
(c)    A pawnbroker shall notify the commissioner of any location at which the pawnbroker or an applicant for a pawnshop license operates a buy shop, secondhand merchandise store, retail outlet, or similar business or any business to which the pawnbroker regularly transfers goods from the pawnshop.

Cite as Tex. Fin. Code § 371.153

§ 371.154. Insurance And Bond

(a)    A pawnbroker shall maintain general liability and fire insurance:
(1)    in a reasonable amount and form required by the commissioner; and
(2)    sufficient to protect pledged goods, including jewelry, at the pawnshop.
(b)    A pawnbroker shall secure a bond:
(1)    in the amount, not to exceed $5,000, required by the commissioner;
(2)    in the form required by the commissioner; and
(3)    conditioned on compliance with this chapter and rules adopted under this chapter.

Cite as Tex. Fin. Code § 371.154

§ 371.155. Pawnshop Security

A pawnshop shall have:
(1)    one or more alarm systems sufficient to detect and signal unauthorized entry or the presence of an unauthorized person to provide for the security of pledged goods; and
(2)    a safe to provide for the security of pledged jewelry.

Cite as Tex. Fin. Code § 371.155

§ 371.156. Pawn Transaction

(a)    Items that are usually sold as a set are considered a single item and must be included in the same pawn transaction.
(b)    A pledged item together with items that are accessories to the pledged item are considered a single item and must be included in the same pawn transaction.
(c)    A separate pawn transaction retains its separate character when it is renewed, unless the parties agree otherwise.
(d)    A pawnbroker may not divide a pawn transaction into more than one transaction to obtain, or with the effect of obtaining, a total pawn service charge that exceeds the charge authorized for an amount financed that is equal to the total of the amounts financed in the resulting transactions.

Cite as Tex. Fin. Code § 371.156

§ 371.157. Pawn Ticket

A pawnbroker, at the time a pawn transaction is entered, shall deliver to the pledgor a pawn ticket or other memorandum that clearly shows:
(1)    the name and address of the pawnshop;
(2)    the pledgor's name, address, and physical description and a driver's license number, military identification number, identification certificate number, or other official number that can identify the pledgor;
(3)    the date of the transaction;
(4)    an identification and description of the pledged goods, including serial numbers if reasonably available;
(5)    the amount of cash advanced or credit extended to the pledgor, designated as "Amount Financed";
(6)    the amount of the pawn service charge, designated as "Finance Charge";
(7)    the total amount, consisting of the amount financed plus the finance charge, that must be paid to redeem the pledged goods on the maturity date, designated as "Total of Payments";
(8)    the "Annual Percentage Rate," computed according to regulations issued by the Federal Reserve Board under the Truth in Lending Act ( 15 U.S.C. Section 1601 et seq.), as amended;

(9)    the maturity date of the pawn transaction; and
(10)    a statement that:
(A)    the pledgor is not obligated to redeem the pledged goods; and
(B)    the pledged goods may be forfeited to the pawnbroker on the 31st day after the maturity date.

Cite as Tex. Fin. Code § 371.157

§ 371.158. Amount Financed

The amount financed by a pawn transaction may not exceed the amount computed under Subchapter C, Chapter 341, using the reference amount of $2,500.

Cite as Tex. Fin. Code § 371.158

§ 371.159. Pawn Service Charge

(a)    A pawnbroker may not contract for, charge, or receive an amount, other than a pawn service charge, as a charge for credit in connection with a pawn transaction.
(b)    A pawn service charge may not exceed the charge disclosed in the pawn ticket or other memorandum delivered to the pledgor.
(c)    A pawn service charge may not exceed an amount equal to:
(1)    20 percent of the total amount financed for one month if that amount is less than or equal to the amount computed under Subchapter C, Chapter 341, using the reference amount of $30;
(2)    15 percent of the total amount financed for one month if that amount is more than the amount computed for Subdivision (1) but less than or equal to the amount computed under Subchapter C, Chapter 341, using the reference amount of $200;
(3)    2-1/2 percent of the total amount financed for one month if that amount is more than the amount computed for Subdivision (2) but less than or equal to the amount computed under Subchapter C, Chapter 341, using the reference amount of $300; or
(4)    1 percent of the total amount financed for one month if that amount is more than the amount computed for Subdivision (3).
(d)    A rate set by Subsection (c) shall be proportionately adjusted for a finance period of less than one month.

Cite as Tex. Fin. Code § 371.159

§ 371.160. Maturity Date; Memorandum Of Extension

(a)    A pawnbroker may not enter a pawn transaction that has a maturity date later than one month after the date of the transaction.
(b)    The pledgor and the pawnbroker by written agreement may change the maturity date of a pawn transaction to a subsequent date.
(c)    The written agreement must clearly set out:
(1)    the new redemption date; and
(2)    the amount of any additional pawn service charge.
(d)    The pawnbroker must provide a copy of the written agreement to the pledgor.

Cite as Tex. Fin. Code § 371.160

§ 371.161. Early Redemption: Reduction Of Pawn Service Charge

If a pledgor redeems the pledged goods before the maturity date of the pawn transaction, any part of the pawn service charge that exceeds $15 shall be reduced by an amount equal to one-thirtieth of the total pawn service charge for each day between the date on which redemption occurs and the original maturity date.

Cite as Tex. Fin. Code § 371.161

§ 371.162. Presentation Of Ticket; Presumption

Except as provided by Section 371.163(a), a person who presents proper identification and a pawn ticket to the pawnbroker is presumed to be entitled to redeem the pledged goods described by the pawn ticket.

Cite as Tex. Fin. Code § 371.162

§ 371.163. Lost Or Destroyed Ticket

(a)    If a pawn ticket is lost, destroyed, or stolen, the pledgor may notify the pawnbroker of that fact in writing. Receipt of this notice invalidates the pawn ticket if the pledged goods have not been redeemed.
(b)    The pawnbroker shall require the pledgor to make a written statement of the loss, destruction, or theft before the pawnbroker delivers the pledged goods or issues a new pawn ticket.
(c)    The pawnbroker shall record on the written statement:
(1)    the date the statement is made; and
(2)    the number of the pawn ticket lost, destroyed, or stolen.
(d)    The statement must be signed by the pawnbroker or the pawnshop employee who accepts the statement from the pledgor.
(e)    A pawnbroker is entitled to a fee of not more than $1 in connection with the accepting of a written statement under this section.

Cite as Tex. Fin. Code § 371.163

§ 371.164. Duty Of Reasonable Care

A pawnbroker shall exercise reasonable care to protect pledged goods from loss or damage.

Cite as Tex. Fin. Code § 371.164

§ 371.165. Return Of Pledged Goods

A pawnbroker shall return pledged goods to the pledgor on payment of the total amount due the pawnbroker in connection with the pawn transaction.

Cite as Tex. Fin. Code § 371.165

§ 371.166. Redemption By Mail

A pawnbroker shall permit a pledgor to redeem pledged goods by mail.

Cite as Tex. Fin. Code § 371.166

§ 371.167. Lost Or Damaged Goods

(a)    A pawnbroker shall replace pledged goods that are lost or damaged while in the pawnbroker's possession with like kind merchandise. The replacement is subject to approval by the commissioner and the pledgor must exhaust this administrative remedy with respect to the lost or damaged pledged goods before seeking a remedy in court. If the commissioner does not approve a replacement before the 91st day after the date on which the commissioner receives a complaint from the pledgor concerning the lost or damaged goods, or if the pledgor does not accept the commissioner's determination, the pledgor may seek a remedy in court.
(b)    For purposes of this section, goods are considered lost if the goods are destroyed or have disappeared and are unavailable for return to the pledgor.

Cite as Tex. Fin. Code § 371.167

§ 371.168. Exemption From Criminal Liability

A pawnbroker is not criminally liable for damages or loss due to an act of God or circumstances beyond the pawnbroker's control.

Cite as Tex. Fin. Code § 371.168

§ 371.169. Unredeemed Pledged Goods; Forfeiture

(a)    A pawnbroker shall hold pledged goods not redeemed by the pledgor on or before the maturity date stated in the pawn ticket issued in connection with a pawn transaction for at least 30 days after that date.
(b)    On or before the 30th day after the original maturity date, the pledgor may redeem the pledged goods by paying:
(1)    the originally agreed redemption price; and
(2)    an additional pawn service charge equal to one-thirtieth of the original monthly pawn service charge for each day after the original maturity date, including the day on which the pledged goods are finally redeemed.
(c)    Pledged goods not redeemed on or before the 30th day after the original maturity date may, at the option of the pawnbroker, be forfeited to the pawnbroker.

Cite as Tex. Fin. Code § 371.169

§ 371.170. Redemption Or Payment By Pledgor Not Required

A pledgor is not obligated to redeem pledged goods or to make a payment on a pawn transaction.

Cite as Tex. Fin. Code § 371.170

§ 371.171. Agreement Requiring Pledgor's Personal Liability Prohibited

A pawnbroker may not enter an agreement requiring the personal liability of the pledgor in connection with a pawn transaction.

Cite as Tex. Fin. Code § 371.171

§ 371.172. Waiver Of Pledgor's Rights Prohibited

A pawnbroker may not accept a waiver of a right or protection of a pledgor under this chapter.

Cite as Tex. Fin. Code § 371.172

§ 371.173. Insurance Charge Limited

A pawnbroker may not impose a charge for insurance in connection with a pawn transaction, except that a pawnbroker may impose a charge in the amount of the actual cost to insure pledged goods being shipped to a pledgor who redeemed the goods by mail.

Cite as Tex. Fin. Code § 371.173

§ 371.174. Identification Of Pledgor Or Seller Required

(a)    A pawnbroker shall require identification of:
(1)    the pledgor if a transaction is a pawn transaction; or
(2)    the seller if a transaction is a purchase of goods by the pawnbroker.
(b)    Identification is acceptable only if it contains a photograph of the pledgor or seller and is:
(1)    a state driver's license;
(2)    a state identification card;
(3)    a passport;
(4)    a military identification;
(5)    a certificate of identification from the Mexican Consulate, certificado de matricula consular; or
(6)    identification issued by the agency of the United States responsible for citizenship and immigration.
(c)    A pawnbroker shall make the pawnbroker's best effort to determine whether the identification:
(1)    is apparently genuine and unaltered; and
(2)    properly identifies the pledgor or seller.

Cite as Tex. Fin. Code § 371.174

§ 371.175. Property Identification Tags Required

(a)    A pawnshop shall identify by a tag or similar means each item of goods located in the pawnshop that:
(1)    has a retail or sale value of more than $25; and
(2)    can be tagged or similarly identified.
(b)    This section does not apply to:
(1)    the personal effects of a person in the pawnshop; or
(2)    furniture, fixtures, or equipment of the pawnshop.

Cite as Tex. Fin. Code § 371.175

§ 371.176. Transactions With Minors Or Persons Under The Influence Of Alcohol Or Drugs Prohibited

A pawnbroker may not:
(1)    accept a pledge or purchase property from a person under 18 years of age; or
(2)    transact business with a person believed to be under the influence of alcohol or drugs.

Cite as Tex. Fin. Code § 371.176

§ 371.177. Purchase Of Used Personal Property

A pawnbroker may not purchase used personal property from a person other than another pawnbroker unless a record is established that contains:
(1)    the seller's name, address, and physical description and a driver's license number, military identification number, identification certificate number, or other official number that can identify the seller;
(2)    a complete description of the property, including the serial number, if reasonably available, or other identifying characteristics; and
(3)    the seller's signed statement that the seller has the right to sell the property.

Cite as Tex. Fin. Code § 371.177

§ 371.178. Acceptance Of Building Construction Materials

(a)    A pawnbroker may not accept the pledge of building construction materials unless a record is established that contains the information required by Section 371.177.
(b)    In this section, "building construction materials" includes:
(1)    copper pipe, tubing, or wiring;
(2)    aluminum wire;
(3)    plumbing supplies;
(4)    electrical supplies;
(5)    window glass;
(6)    lumber; and
(7)    other similar materials.

Cite as Tex. Fin. Code § 371.178

§ 371.179. Displays Of Certain Weapons Prohibited

A pawnbroker may not display for sale in a storefront window or sidewalk display case or depict on a sign or advertisement in such a way that the item, sign, or advertisement may be viewed from a street:
(1)    a pistol;
(2)    a dirk;
(3)    a dagger;
(4)    a blackjack;
(5)    a hand chain;
(6)    a sword cane;
(7)    knuckles made of metal or any other hard substance; or
(8)    a switchblade, springblade, or throwblade knife.

Cite as Tex. Fin. Code § 371.179

§ 371.180. Advertisements

(a)    A person who does not hold a pawnshop license may not:
(1)    advertise or cause to be advertised the making, arranging, or negotiating of a loan subject to this chapter; or
(2)    use in an advertisement a word, symbol, or statement that states or suggests that the person is a pawnbroker.
(b)    In each advertisement that purports to offer credit subject to this chapter, the advertiser shall disclose the legal or registered name of the advertiser and the physical address of the advertiser's place of business. This subsection does not apply to an advertisement located on the premises of the advertiser's place of business.

Cite as Tex. Fin. Code § 371.180

§ 371.181. Stolen Goods

(a)    A pawnbroker shall monitor goods purchased, accepted in pawn, or otherwise acquired by the pawnbroker in order to identify and prohibit transactions involving stolen goods.
(b)    The Finance Commission of Texas shall adopt rules that allow:
(1)    a consumer who has filed an offense report with a local law enforcement agency to request that a pawnbroker search the records of the pawnshop; and
(2)    the pawnbroker to assist the consumer and the local law enforcement agency in locating and recovering stolen property.

Cite as Tex. Fin. Code § 371.181

§ 371.182. Hold Period

The commissioner may designate a reasonable hold period during which a pawnbroker may not sell or otherwise dispose of an item of goods acquired and offered for sale or other disposition by the pawnbroker.

Cite as Tex. Fin. Code § 371.182

§ 371.183. Consumer Information

The Finance Commission of Texas by rule may require a pawnshop to display, in an area in the pawnshop accessible to a consumer, materials provided by the commissioner that are designed to:
(1)    inform a consumer of the duties, rights, and responsibilities of parties to a transaction regulated by the commissioner; and
(2)    inform and assist a robbery, burglary, or theft victim.

Cite as Tex. Fin. Code § 371.183