[HISTORY: Adopted by the Common Council of the City of Middletown 12-7-2009 by L.L. No. 8-2009. Amendments noted where applicable.]
As used in this chapter, the following terms shall have the meanings indicated:
- COLLATERAL LOAN BROKER
- Any person loaning money on deposit or pledge of personal property, other than securities or printed evidences of indebtedness, dealing in the purchase of personal property on condition of selling back at a stipulated price or designated or doing business as furniture storage warehousemen, and loaning and advancing money upon goods, wares or merchandise pledged or deposited as collateral security; a pawnbroker.
- One or more persons of either sex, natural persons, corporations, partnerships, associations, joint-stock companies and all other entities capable of being sued.
No person, either as principal, agent or employee, shall, within the limits of the City of Middletown, establish, engage in or carry on the business of collateral loan broker, either separately or in connection with some other business, without first having obtained and paid for and having in full force and effect a license as herein provided.
Every person desiring to procure a license as herein provided shall file with the City Clerk a written application upon a blank form prepared and furnished by the City. Such application shall contain the names and residences of the applicant if an individual, partnership or firm, or the names and residences of the principal officers if the applicant is an association or corporation. Such application shall also describe in detail the character of the business in which he/she, they or it desire to engage. The application shall also state the following:
The length of time such applicant or applicants, if an individual, firm or partnership, or the manager or person in charge, if the applicant is a firm, partnership, corporation or association, has or have resided in the State of New York; his/her or their places of previous residences and employment; whether he/she or they or any of them have ever been convicted of a felony or misdemeanor and, if so, what offense, when and in what court.
The premises where such business is to be located or carried on, giving street and number.
Whether the applicant or applicants or manager have, either alone or with someone else, ever engaged in the business of collateral loan broker.
Such application shall be signed and acknowledged before a notary public.
Such application shall be accompanied by a bond to the City of Middletown, approved as to form by the Corporation Counsel, in the penal sum of $10,000, with two responsible sureties or sufficient collateral security, conditioned for the faithful performance of the duties and obligations pertaining to the business so licensed, the due observance during the term of the license of any and all ordinances and laws which are now in force or may hereafter be adopted or enacted respecting the business of collateral loan broker as defined in § 214-1, and the accounting for and paying over of all moneys which the licensee shall be liable to pay as such collateral loan broker to the City of Middletown.
Upon the filing of the application, bond and information as provided in the previous sections, the Mayor may, upon his/her approval of such application and bond as to the sufficiency of the sureties or collateral securities, and upon the payment to the City of the license fee hereinafter provided, direct the City Clerk to issue to the applicant a license to engage in the business as provided in § 214-2. No license shall be refused except for a specific reason and for the protection of the public safety or welfare.
All licenses shall be numbered in the order in which they are issued and shall state clearly the location of the place of business in which the person receiving such license shall be authorized to establish, engage in and carry on the business, the kind of business, the dates of issuance and expiration of the license, the fees paid and the name and address of the licensee.
No applicant to whom a license has been refused shall make further application until a period of at least six months shall have elapsed since the last previous rejection, unless he/she can show that the reason for such rejection no longer exists.
Every collateral loan broker shall pay an annual license fee in the amount of $200.
All renewal licenses shall be issued as of January 1 and shall continue in force until December 31 next succeeding the issuance thereof, unless sooner revoked by the Mayor.
New licenses shall be issued as of the date of approval by the Mayor, to be effective until the next succeeding December 31, and the annual fee shall be paid to cover the period of the license.
No license shall be used by any person other than the original licensee; and any holder of such license who permits it to be used by any other person, and any person who uses such license granted to any other person, shall be guilty of a violation of this chapter.
Whenever a license shall be lost or destroyed without fault on the part of the holder or his/her agent or employee, a duplicate license in lieu thereof under the original application and bond may be issued by the Mayor in his/her discretion, upon the filing with it of an affidavit by the licensee, setting forth the circumstances of the loss and what, if any, search has been made for its recovery. No person shall destroy, deface or injure a license in any manner, or change the name, number or dates therein.
The Mayor may, at any time, after investigation and after a hearing before the Mayor at which the licensee may be heard, for violation of this chapter or for any other proper cause, revoke any license granted under the provisions of this chapter. Whenever any license shall be revoked, no refund of any unearned portion thereof shall be made, and no license shall be granted to any person whose license has been revoked within a period of one year from the date of such revocation. Notice of such revocation and the reason or reasons therefor in writing shall be served by the Mayor upon the person named in the application by personal service or by mailing the same to the address given in the application and upon filing a copy of such with the City Clerk.
If any licensee shall move his place of business from the place designated in the license, he shall immediately give notice to the City Clerk and have the same endorsed on the license.
No collateral loan broker shall accept any pledge until the person pawning such pledge shall have adequately proved his identity or shall have adequately proved ownership of the article pawned. Every licensed collateral loan broker shall keep in a substantially bound book, which shall be legibly written in ink and in English at the time of making a loan, an account and description of the goods, articles or things pawned or pledged, including the number or numbers and any monogram, inscription or other marks of identification that may appear thereon, the amount loaned thereon, the time and day of the loan and its maturity, the rate of interest paid on such loan and the name, general description and residence of the person pawning or pledging such goods, articles or things and a record of the means of identification of the pledger or of the proof of ownership by the pledger. Such book and all articles pawned or pledged shall at all reasonable times be open to inspection by any police officer, the Mayor, or any person duly authorized in writing for such purpose by the Mayor or Chief of Police, who shall exhibit such written authority to the collateral loan broker and to all persons authorized by § 45 of the General Business Law of the State of New York. No entry in such book shall be erased, obliterated, altered or defaced.
Every collateral loan broker shall, at such times as the Police Chief may prescribe in a written notice, to be served upon such collateral loan broker by a member of the Police Department, report to the Police Department, on blank forms to be furnished by the Police Department, a description of all goods, articles or things, or the identity or proof of ownership of pledgers, such as is required to be kept under § 214-9 of this chapter, which have been pawned or pledged in the course of business of the collateral loan broker during the days specified in such notice and, if such notice from the Chief of Police so prescribes, such collateral loan broker shall, at that time and until he/she is so notified to discontinue so doing, keep and furnish on such blank forms such information, as well as a general description of every person depositing such pledge.
Every licensed collateral loan broker shall, at the time of each loan, deliver to the person pawning or pledging any goods, articles or things a memorandum or note signed by him/her containing his/her address and the substance of the entry required to be made or received by any collateral loan broker for any such entry, memorandum or note. The holder of such memorandum or note shall be presumed to be the person entitled to redeem the pledge, and the collateral loan broker shall deliver such article to the person so presenting such memorandum or note upon payment of principal and interest; should such memorandum or note be lost or mislaid, the pawner shall at once apply to the collateral loan broker, in which case it shall be the duty of the collateral loan broker to permit such person to examine his/her books, and upon finding the entry for such memorandum or note so lost and upon giving to the collateral loan broker an exact description of the article pawned, the collateral loan broker shall issue a second or stop ticket for the same. In case such pawner neglects to so apply and examine such books and receive such memorandum or note in the manner above stated, the collateral loan broker shall be bound to deliver the pledge to any person producing such memorandum or note for redemption thereof. This section is not to be construed as in any manner limiting or affecting such collateral loan broker's common-law liability in cases where goods are stolen or other legal defects of title exist in the pledge.
No collateral loan broker shall ask, demand or receive any greater rate of interest than four per centum per month, or any fraction of a month, and a notice containing a list of such rates of interest as herein provided and in accordance with the Act of Congress entitled, "Truth in Lending Act" (15 U.S.C. 1601 et seq.) and the regulations thereunder, as such Act and regulations may from time to time be amended, shall be conspicuously displayed within the premises of such collateral loan broker. A minimum interest charge of $0.25 per month may be made on any loan.
No collateral loan broker shall receive or be entitled to any interest or charges as provided by this section on any loan for any period of time exceeding 15 months from the date of the making of such loan, provided, however, that where a loan is extended at the direct request of the pledger, the collateral loan broker may receive and be entitled to any interest or charges provided by this article on such loan for any period of time not to exceed 15 months from the date of such extension.
No such collateral loan broker shall make any charge for packing, storing, keeping or caring for any article, goods or thing pledged or upon which a loan has been made.
No licensed collateral loan broker shall sell or otherwise dispose of any pawn or pledge unless the interest shall be six months or more in arrears, and all such sales shall be at public auction and shall be conducted by auctioneers licensed with the State of New York. All bids for the purchase of any defaulted pledge offered at such sale shall be expressed in dollars and cents without the use of any special signs, signals or motions if less than 11 people attend such sale.
Notice of every such public sale shall be published for at least six days previous thereto in the principal newspaper printed in the City of Middletown, and such notice shall specify the time and place at which such public sale is to take place and a description of the goods or articles to be sold. Every collateral loan broker shall enter in a book kept for that purpose a true account of the sale of all goods sold by him/her at auction or otherwise, stating the day of the month when pledged, the name of the person pledging, the day when and the amount for which each pledge was sold and the name of the auctioneer. Any person who shall have pledged any unredeemed goods, or his assigns, administrators and executors, shall at all reasonable times be permitted to inspect such entry book of sale. Every collateral loan broker shall give notice of the expiration of the six months from the date of the loan after which a public sale of the article pledged may take place, by letter directed to the borrower at his/her last known residence at least 10 days and not more than 20 days after the expiration of such six months.
The surplus money, if any, arising from any such sale, after deducting the amount of the loan, the interest then due on the same and the expense of advertising and sale shall be paid over by the collateral loan broker to the person who would be entitled to redeem the pledge in case no such sale had taken place, provided that demand therefor is made within one year after such sale shall have taken place.
In the event that there is any surplus money due to a pledger after such sale, the collateral loan broker shall give the pledger written notice thereof, by mailing to such pledger, directed to him/her at the address given at the time of pledging or in the event such pledger has notified the collateral loan broker, in writing, of a change of address, to such new address, within 30 days after such sale, a notice which shall state the name and address of the collateral loan broker, the number of the pledge, the date of sale and the amount of any surplus.
Every licensee shall cause to be posted in a conspicuous part of his/her office or place where the collateral loan broker business is carried on, so as to be visible to all persons pledging goods, a printed card or table of the rates of interest authorized by this chapter, printed in large type and in both the English and Spanish languages.
No collateral loan broker shall:
Permit the redemption of any article received by him/her in pawn until 48 hours after the same has been received by him/her in pawn.
Fail to deliver to the borrower a plain and complete receipt for all payments on account at the time such payments are made.
Carry on business at any other place than the one designated in his/her license.
Continue to carry on business after his/her license is revoked or shall have expired.
Display signage containing the words "pawn," "pawnbroker" or "pawnshop."
Operate his/her/its collateral loan business except in conjunction with a retail sales component that comprises at least 75% of the combined retail/collateral loan business.
No collateral loan broker or person in the employ of a collateral loan broker shall receive or purchase any goods, chattels, wares or merchandise from, or make any loan or advance or permit to be loaned or advanced to, any child, actually or apparently under the age of 18 years, any money, or in any manner directly or indirectly receive any goods, chattels, wares or merchandise from any such child in pledge for loans made or to be made to it or to any other person or otherwise howsoever. It shall be no defense to a prosecution for a violation of this section that in the transaction upon which the prosecution is based the child acted as the agent or representative of another or that the defendant dealt with such child as the agent or representative of another.
No license issued under this chapter may be assigned, sold or transferred.
Any person who, himself or by his/her clerk, agent or employee, shall establish, engage in or carry on the business of collateral loan broker or shall violate any of the provisions of this chapter, or who, having had his/her license revoked, shall continue to engage in or carry on the business of collateral loan broker, shall be guilty, upon conviction, of an offense punishable by a fine of not less than $250 nor more than $1,000 or by imprisonment for a period not exceeding 15 days, or by both such fine and imprisonment.
In addition to the penalty imposed, the license of the person violating the same shall be canceled or revoked, and the bond upon such license shall be forfeited. Upon such forfeiture, the amount of the bond shall thereupon become due and payable to the City of Middletown, and the amount thereof may be recovered in a civil action based upon such forfeiture.