102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2511

 

Introduced 2/26/2021, by Sen. Cristina Castro

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Pawnbroker Regulation Act. Provides that a pawnbroker may contract for and receive a monthly finance charge for expenses, losses, and services that may not exceed one-fourth (rather than one-fifth) of the loan amount. Provides that title to pledged property transfers to a pawnbroker after the expiration of the default date grace period or upon the expiration of an agreed extension. Provides procedures for a law enforcement officer to return property that was subject to a hold order to a pawnbroker or to return stolen property to its owner. Provides that after the return of stolen property, a pawnbroker shall not be liable to any private person or government entity for any further claims on the returned property. Provides information required to be included in a hold order. Provides that a person who owns or is employed by a pawnbroker licensed under the Act shall annually complete 4 hours of continuing education in a responsible training program approved by the Department of Financial and Professional Regulation. Provides that the license of a pawnbroker whose owners, managers, or employees fail to comply with the continuing education requirement may be suspended, revoked, or may face other disciplinary action. Denies home rule powers to regulate pawnbroker employee training and pawnbroker licensing. Provides that a person seeking approval or re-approval from the Department to offer a responsible training program may apply for approval or re-approval between August 1 and August 15 every 4 years. Establishes a nonrefundable application fee for approval or re-approval from the Department to offer a responsible training program. Provides that denial of approval by the Department shall include a detailed description of the reasons for the denial. Makes other changes.


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FISCAL NOTE ACT MAY APPLY
HOME RULE NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB2511LRB102 17225 BMS 22685 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Pawnbroker Regulation Act is amended by
5changing Sections 2, 9, 10, and 12 and by adding Section 13 as
6follows:
 
7    (205 ILCS 510/2)  (from Ch. 17, par. 4652)
8    Sec. 2. It shall be unlawful for any pawnbroker to charge
9or collect a greater benefit or percentage upon money
10advanced, and for the use and forbearance thereof, than the
11rate of 3% per month. Nothing in this Section shall be
12construed so as to conflict with the law pertaining to usury
13and the person receiving money so advanced may hold such
14moneys to pay any fees in addition to interest as herein
15provided.
16    Each pawnbroker, when making a loan under this Section,
17must disclose in printed form on the pawn contract the
18following information to the persons receiving the loan:
19        (1) the amount of money advanced, which must be
20    designated as the amount financed;
21        (2) the maturity date of the pawn, which must be at
22    least 30 days after the date of the pawn;
23        (3) the total pawn interest and service charge payable

 

 

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1    on the maturity date, which must be designated as the
2    finance charge;
3        (4) the total of payments that must be paid to redeem
4    the pledged goods on the maturity date, which must be
5    designated as the total of payments; and
6        (5) the annual percentage rate, computed according to
7    the regulations adopted by the Board of Governors of the
8    Federal Reserve System under the Federal Truth in Lending
9    Act.
10    Each pawnbroker may contract for and receive a monthly
11finance charge including interest and fees not to exceed
12one-fourth one-fifth of the loan amount, as set forth herein,
13for appraising, investigating title, storing and insuring the
14collateral, closing the loan, making daily reports to local
15law enforcement officers including enhanced computerized
16reporting, complying with regulatory requirements, and for
17other expenses and losses of every nature whatsoever and for
18all other services. Such fees, when made and collected, shall
19not be deemed interest for any purpose of law.
20(Source: P.A. 90-477, eff. 7-1-98.)
 
21    (205 ILCS 510/9)  (from Ch. 17, par. 4659)
22    Sec. 9. No pawnbroker shall knowingly purchase or take any
23article in pawn or pledge from any person appearing to be
24intoxicated, nor from any person known to have been convicted
25of theft. A law enforcement officer may provide such criminal

 

 

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1conviction information to a pawnbroker. When any person is
2found to be the owner of stolen property which has been pawned,
3such property shall be returned to the owner thereof without
4the payment of the money advanced by the pawnbroker thereon or
5any costs or charges of any kind which the pawnbroker may have
6placed upon the same.
7(Source: P.A. 84-1308.)
 
8    (205 ILCS 510/10)  (from Ch. 17, par. 4660)
9    Sec. 10. Sale of property. No personal property pledged or
10received on deposit by any pawnbroker shall be permitted to be
11redeemed from such pawnbroker for a period of 48 hours after
12the delivery of the copy and statement required by Section 7 of
13this Act required to be delivered to the officer or officers
14named therein. No personal property purchased by any
15pawnbroker shall be sold or removed from the place of business
16or transferred to another pawnshop location of such pawnbroker
17for a period of 10 days after the delivery of the copy and
18statement required by Section 7 of this Act required to be
19delivered to the officer or officers named therein. If the
20pawner or pledger fails to repay the loan during the period
21specified on the pawn ticket, the pawnbroker shall
22automatically extend a grace period of 30 days from the
23default date on the loan during which the pawnbroker shall not
24dispose of or sell the personal property pledged. The parties
25may agree to extend or renew a loan upon terms agreed upon by

 

 

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1the parties, provided the terms comply with the requirements
2of this Act. Title to the pledged property transfers to the
3pawnbroker after the default date grace period expires or upon
4expiration of an agreed extension. A county or municipality,
5including a home rule unit, may regulate these holding periods
6in a manner that is more restrictive than the regulation
7provided in this Section 10. A home rule unit may not regulate
8these holding periods in a manner less restrictive than the
9regulation by the State. This Section is a limitation under
10subsection (i) of Section 6 of Article VII of the Illinois
11Constitution on the concurrent exercise by home rule units of
12the powers and functions exercised by the State.
13(Source: P.A. 99-188, eff. 1-1-16.)
 
14    (205 ILCS 510/12)
15    Sec. 12. Hold order.
16    (a) For the purposes of this Section, "hold order" means a
17written legal instrument issued to a pawnbroker by a law
18enforcement officer who is commissioned by the law enforcement
19agency of the municipality or county that licenses and
20regulates the pawnbroker, evidencing a criminal law
21enforcement investigation, and ordering the pawnbroker to
22retain physical possession of pledged goods in the possession
23of the pawnbroker or property purchased by and in the
24possession of the pawnbroker and not to not return, sell, or
25otherwise dispose of such property as such property is

 

 

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1believed to be misappropriated goods.
2    (b) Upon written notice from a law enforcement officer
3indicating that property in the possession of a pawnbroker and
4subject to a hold order is needed for the purpose of furthering
5a criminal investigation and prosecution, the pawnbroker shall
6release the property subject to the hold order to the custody
7of the law enforcement officer for such purpose and the law
8enforcement officer shall provide a written acknowledgment
9that the property has been released to the law enforcement
10officer. The release of the property to the custody of the law
11enforcement officer shall not be considered a waiver or
12release of the pawnbroker's property rights or interest in the
13property. Upon completion of the criminal investigation, the
14property shall be returned to the pawnbroker who consented to
15its release; except that:
16        (1) if the criminal investigation took place within
17    counties with a population of less than 300,000 and that
18    investigation: (A) has determined that the property is
19    stolen property, (B) has determined that the fair market
20    value of the stolen property is $500 or less, (C) has
21    identified the rightful owner of the stolen property, and
22    (D) contains a court-admissible sworn statement by the
23    rightful owner that he or she is the true owner of the
24    stolen property, then law enforcement shall return the
25    property to that owner without the payment of the money
26    advanced by the pawnbroker or any costs or charges of any

 

 

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1    kind that the pawnbroker may have placed upon the same; or
2        (2) if the criminal investigation took place within
3    counties with a population of more than 300,000 and that
4    investigation: (A) has determined that the property is
5    stolen property, (B) has determined that the then-fair
6    market value of the stolen property is $1,000 or less, (C)
7    has identified the rightful owner of the stolen property,
8    and (D) contains a court-admissible sworn statement by the
9    rightful owner that he or she is the true owner of the
10    stolen property, then law enforcement shall return the
11    property to that owner without the payment of the money
12    advanced by the pawnbroker or any costs or charges of any
13    kind that the pawnbroker may have placed upon the same.
14    (c) After the return of said property, the pawnbroker
15shall not be liable to any private person or government entity
16for any further claims on the returned property.
17    Law enforcement shall provide all information related to
18such persons involved in the investigation to the pawnbroker,
19including the investigative report, without the need for a
20subpoena, court order, or further legal action or government
21filing.
22    The hold order shall expire on the 120th day after it is
23issued, at which time the pawnbroker may exercise its rights
24under any applicable pawn ticket or extension. If , if the law
25enforcement officer has not completed the criminal
26investigation within 120 days after the issuance of the hold

 

 

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1order its release, the officer shall immediately return any
2the property in law enforcement custody to the pawnbroker or
3obtain and furnish to the pawnbroker a warrant for a maximum
4120-day hold order extension and, as applicable, continued law
5enforcement the continued custody of the property.
6    The pawnbroker shall not release or dispose of the
7property except pursuant to a court order or the expiration of
8the holding period of the hold order, including all
9extensions.
10    In cases where criminal charges have been filed and the
11property may be needed as evidence, the prosecuting attorney
12shall notify the pawnbroker in writing. The notice shall
13contain the case number, the style of the case, and a
14description of the property. The pawnbroker shall hold any
15such property in the pawnbroker's custody until receiving
16notice of the disposition of the case from the prosecuting
17attorney. The prosecuting attorney shall notify the pawnbroker
18and claimant in writing within 15 days after the disposition
19of the case.
20    (d) A hold order, and a foregoing notice of criminal
21charges, must specify:
22        (1) the name and address of the pawnbroker;
23        (2) the law enforcement investigation number and the
24    name, title, and identification number of the law
25    enforcement officer placing the hold order or the court
26    placing the hold order;

 

 

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1        (3) a complete description of the property to be held,
2    including model number and serial number, if applicable;
3        (4) the name of the alleged owner or person reporting
4    the alleged misappropriated property, unless otherwise
5    prohibited by law;
6        (5) the mailing address of the pawnbroker where the
7    property is held; and
8        (6) the issuance and expiration date of the holding
9    period.
10    (e) The pawnbroker or the pawnbroker's representative must
11sign and date a copy of the hold order as evidence of receipt
12of the hold order and the beginning of the 120-day holding
13period.
14(Source: P.A. 96-1365, eff. 7-28-10.)
 
15    (205 ILCS 510/13 new)
16    Sec. 13. Continuing education.
17    (a) A person who owns or is employed by a pawnbroker
18licensed under this Act shall annually complete 4 hours of
19continuing education in a responsible training program
20approved by the Department of Financial and Professional
21Regulation.
22    (b) The responsible training program modules shall consist
23of training on State and local laws, administrative rules, and
24regulations that pertain to the business of being a licensed
25pawnbroker under this Act, including, but not limited to:

 

 

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1        (1) the prohibition of a pawn transaction to minors;
2        (2) acceptable forms of identification, how to check
3    identification, and common mistakes made in verification
4    of identification;
5        (3) compliance with all pawn inventory requirements;
6        (4) maintenance of records;
7        (5) security and surveillance;
8        (6) inspections by State and local licensing and law
9    enforcement authorities, including hold order procedures;
10    and
11        (7) other areas as determined by rule.
12    (c) Upon the successful completion of the responsible
13training program, the provider shall deliver proof of
14completion either through United States mail or electronic
15communication to the employee of the pawnshop and the
16pawnbroker, who shall retain a copy of the certificate on file
17at the location of the licensed pawnshop.
18    (d) The license of a pawnbroker whose owners, managers, or
19employees fail to comply with this Section may be suspended,
20revoked, or may face other disciplinary action.
21    (e) The regulation of pawnbroker employee training and
22pawnbroker licensing is an exclusive power and function of the
23State. A home rule unit may not regulate pawnbroker employee
24training and pawnbroker licensing. This subsection is a denial
25and limitation of home rule powers and functions under
26subsection (h) of Section 6 of Article VII of the Illinois

 

 

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1Constitution.
2    (f) Persons seeking Department approval to offer the
3training required by subsection (b) may apply for such
4approval between August 1 and August 15 every 4 years in a
5manner prescribed by the Department.
6    (g) Persons seeking Department approval to offer the
7training required by subsection (b) shall submit a
8nonrefundable application fee of $2,000 to be deposited into
9the Pawnbroker Regulation Fund or a fee set by rule. Any
10changes made to the training module shall be approved by the
11Department.
12    (h) The Department shall not unreasonably deny approval of
13a training module, whether in-person or online, that meets all
14the requirements of subsection (b). A denial of approval shall
15include a detailed description of the reasons for the denial.
16    (i) A person approved to provide the training required by
17subsection (b) shall submit an application for re-approval
18between August 1 and August 15 of each even-numbered year and
19include a nonrefundable application fee of $2,000 to be
20deposited into the Pawnbroker Regulation Fund or a fee set by
21rule.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    205 ILCS 510/2from Ch. 17, par. 4652
4    205 ILCS 510/9from Ch. 17, par. 4659
5    205 ILCS 510/10from Ch. 17, par. 4660
6    205 ILCS 510/12
7    205 ILCS 510/13 new