Chapter 3Licensure

Section § 21300

Explanation

This law states that local police authorities must issue a pawnbroker's license to applicants who meet certain requirements and have no convictions related to stolen property. The Department of Justice must review applications, and if they don't respond within 30 days, the license should be granted. Applications and renewals are processed with fees that fund a reporting system, and local authorities can charge for processing costs. A conviction means a guilty plea or verdict and cannot be the only reason to deny a license unless it shows a pattern of violations. This law becomes effective on January 1, 2029.

(a)CA Financial Code § 21300(a) The chief of police, the sheriff, or, where appropriate, the police commission shall accept an application for and grant a license permitting the licensee to engage in the business of pawnbroker, as defined in Section 21000, at the address indicated on the application, to an applicant who has complied with the requirements of Sections 21303, 21304, and 21305 and has not been convicted of an attempt to receive stolen property or any other offense involving stolen property. Prior to the granting of a license, the licensing authority shall submit the application to the Department of Justice. If the Department of Justice does not comment on the application within 30 days thereafter, the licensing authority shall grant the applicant a license. All forms for application and licensure, and license renewal, shall be prescribed and provided by the Department of Justice. A fee shall be charged to the applicant by the Department of Justice, as specified in Section 21642.5 of the Business and Professions Code, for processing the initial license application and funding the single, statewide, uniform electronic reporting system set forth in Section 21628 of the Business and Professions Code. The licensing authority shall collect the fee and transmit the fee to the Department of Justice. In addition, the police chief, sheriff, or, where appropriate, the police commission, may charge a fee to the applicant not to exceed the actual costs incurred to process the application and to collect and transmit the fee charged by the Department of Justice.
(b)CA Financial Code § 21300(b) For the purposes of this section, “convicted” means a plea or verdict of guilty or a conviction following a plea of nolo contendere.
(c)CA Financial Code § 21300(c) Notwithstanding subdivisions (a) and (b), no person shall be denied a pawnbroker’s license solely on the grounds that they violated any provision contained in Chapter 1 (commencing with Section 21000) or Chapter 2 (commencing with Section 21200), or any provision contained in Article 4 (commencing with Section 21625) or Article 5 (commencing with Section 21650) of Chapter 9 of Division 8 of the Business and Professions Code, unless the violation demonstrates a pattern of conduct.
(d)CA Financial Code § 21300(d) This section shall become operative on January 1, 2029.
pawnbroker license application stolen property conviction Department of Justice review license processing fee electronic reporting system pattern of conduct guilty plea or verdict police chief responsibilities license renewal local police authorities pattern of violations nolo contendere plea license requirements said application effective date January 1 2029
(Repealed (in Sec. 1) and added by Stats. 2024, Ch. 223, Sec. 1.5. (AB 2231) Effective January 1, 2025. Operative January 1, 2029, by its own provisions.)

Section § 21300.1

Explanation

In California, it's illegal to act as a pawnbroker or claim to be one unless you have the proper license. This applies to individuals and businesses.

It is unlawful for any person who is not duly licensed under this section to act as a pawnbroker or represent himself, herself, or a business entity to be a pawnbroker or a pawnbrokerage business entity.
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(Added by Stats. 1996, Ch. 923, Sec. 8. Effective January 1, 1997.)

Section § 21301

Explanation

This law outlines the requirements for renewing a pawnbroker license in California. Licenses must be renewed every two years by submitting an application, paying the necessary fees, and following set rules. The licensing authority collects the fees and sends them to the Department of Justice. A pawnbroker's license could be lost for breaking certain conditions, like not operating at the designated location, failing to display the license, or being convicted of crimes related to stolen property.

However, if minor violations occur without showing a pattern, they won't automatically lead to the denial of license renewal or forfeiture.

(a)CA Financial Code § 21301(a) A license granted pursuant to Section 21300 shall be renewable the second year from the date of issue, and every other year thereafter, upon the filing of a renewal application, payment of a renewal fee specified by the licensing authority as described in this subdivision, and compliance with the requirements of Section 21303. The Department of Justice shall also require the licensee, in addition to any locally assessed fee as set forth herein, to pay a fee as described in Section 21642.5 of the Business and Professions Code. The licensing authority shall collect the fee and transmit the fee and a copy of the renewed license to the Department of Justice. The police chief, sheriff, or, where appropriate, the police commission may charge a fee not to exceed the actual costs incurred to process the renewal application of the licensee and to collect and transmit the fee charged by the Department of Justice.
(b)CA Financial Code § 21301(b) The license shall be subject to forfeiture by the licensing authority, and the licensee’s activities as a pawnbroker shall be subject to being enjoined pursuant to Section 21302, for breach of any of the following conditions:
(1)CA Financial Code § 21301(b)(1) The business shall be carried on only at the location designated on the license. The license shall designate all locations where property belonging to the business is stored. Property of the business may be stored at locations not designated on the license only with the written consent of the local licensing authority.
(2)CA Financial Code § 21301(b)(2) The license or a copy thereof, certified by the licensing authority, shall be displayed on the premises in plain view of the public.
(3)CA Financial Code § 21301(b)(3) The licensee shall not engage in any act that the licensee knows to be in violation of this article.
(4)CA Financial Code § 21301(b)(4) The licensee shall not be convicted of an attempt to receive stolen property or other offense involving stolen property. For the purposes of this paragraph, “convicted” means a plea or verdict of guilty or a conviction following a plea of nolo contendere. Any action that the chief of police, the sheriff, or, where appropriate, the police commission is permitted to take following that conviction may be taken when the time for appeal has elapsed, the judgment of conviction has been affirmed on appeal, or an order granting probation is made suspending the imposition of sentence, irrespective of a subsequent order under Section 1203.4 of the Penal Code.
(c)CA Financial Code § 21301(c) Notwithstanding subdivisions (a) and (b), no renewal application for a pawnbroker’s license may be denied, nor may his or her pawnbroker’s license be forfeited, solely on the grounds that the applicant violated any provision contained in Chapter 1 (commencing with Section 21000) or Chapter 2 (commencing with Section 21200), or any provision contained in Article 4 (commencing with Section 21625) or Article 5 (commencing with Section 21650) of Chapter 9 of Division 8 of the Business and Professions Code, unless the violation demonstrates a pattern of conduct.
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(Amended by Stats. 2012, Ch. 172, Sec. 10. (AB 391) Effective August 17, 2012.)

Section § 21301.1

Explanation

This law says that if you want to advertise as a pawnbroker, you need to include your pawnbroker's license number in the ad. It prevents people from suggesting they're pawnbrokers without showing their license number, especially when their services involve using personal property as loan security.

It is unlawful for any person to advertise his or her services as a pawnbroker, or to use any words or parts of words in any advertisements that connote a transaction involving the taking of tangible personal property as security for a loan unless the pawnbroker’s license number is clearly displayed in the advertisement.
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(Added by Stats. 1996, Ch. 923, Sec. 10. Effective January 1, 1997.)

Section § 21302

Explanation

The district attorney or Attorney General in California can file a lawsuit to stop or prevent someone from breaking certain regulations. These regulations are listed in specific chapters of the Business and Professions Code and involve rules starting with numbers like 21000 and 21625. If they take legal action, it follows specific legal procedures outlined in another set of laws.

The district attorney or the Attorney General, in the name of the people of the State of California, may bring an action to enjoin the violation or the threatened violation of any regulation made pertaining to the provisions contained in Chapter 1 (commencing with Section 21000) or Chapter 2 (commencing with Section 21200) of this division or Article 4 (commencing with Section 21625) or Article 5 (commencing with Section 21650) of Chapter 9 of Division 8 of the Business and Professions Code. Any proceeding brought hereunder shall be governed in all respects by the provisions of Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of the Code of Civil Procedure.
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(Added by Stats. 1993, Ch. 782, Sec. 4. Effective January 1, 1994.)

Section § 21303

Explanation

To get or renew a pawnbroker's license, the applicant must provide a two-year, $20,000 surety bond from an approved company. This bond protects customers who have pledged items if these items are unavailable due to the pawnbroker's criminal actions. The customer must prove, with convincing evidence, that they've met all requirements to redeem their pledged property according to their loan contract.

(a)CA Financial Code § 21303(a) As a condition precedent to the issuance or renewal of a pawnbroker’s license the applicant shall file a pawnbroker’s two-year nonrevokable surety bond with the issuing authority, in the sum of twenty thousand dollars ($20,000). The pawnbroker’s bond required by this article shall be executed by an admitted surety in favor of the State of California and shall be filed by the applicant with the licensing authority.
(b)CA Financial Code § 21303(b) The bond shall be for the benefit of pledgors of pledged property when the property is not available for redemption, due to the criminal negligence, criminal malfeasance, or other criminal conduct of the pawnbroker, and the pledgor has complied with the conditions precedent to redemption under the terms of the loan contract. The pledgor has the burden of establishing by clear and convincing evidence that all conditions precedent to redemption under the terms of the loan contract have been performed.
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(Added by Stats. 1993, Ch. 782, Sec. 4. Effective January 1, 1994.)

Section § 21303.5

Explanation

Starting January 1, 2026, anyone applying for a new pawnbroker's license in California must complete at least eight hours of prelicensing education approved by the California Pawnbroker Education Council. They must also submit a certificate of completion to the licensing agency. Similarly, pawnbrokers renewing their license must complete eight hours of continuing education and submit proof of completion. These requirements are temporary and will be in effect until January 1, 2029, at which point they are repealed.

(a)CA Financial Code § 21303.5(a) On and after January 1, 2026, as a condition precedent to issuing a new pawnbroker’s license, the applicant shall complete at least eight hours of prelicensing education approved by the California Pawnbroker Education Council pursuant to Chapter 4 (commencing with Section 21400) and submit to the licensing agency a certificate of completion issued by the council pursuant to Section 21409.
(b)CA Financial Code § 21303.5(b) On and after January 1, 2026, as a condition precedent to renewing a pawnbroker’s license, the applicant shall complete at least eight hours of continuing education approved by the California Pawnbrokers Education Council pursuant to Chapter 4 (commencing with Section 21400) and submit to the licensing agency a certificate of completion issued by the council pursuant to Section 21409.
(c)CA Financial Code § 21303.5(c) This section shall remain in effect only until January 1, 2029, and as of that date is repealed.
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(Added by Stats. 2024, Ch. 223, Sec. 2. (AB 2231) Effective January 1, 2025. Repealed as of January 1, 2029, by its own provisions.)

Section § 21304

Explanation

If someone wants to get a pawnbroker's license, they need to show they have at least $100,000 in liquid assets or provide a $100,000 surety bond. Alternatively, they can deposit certain financial instruments instead of a bond. This information must be verified by a California CPA and submitted under penalty of perjury.

This rule doesn't apply to those with a secondhand dealer's license who were already working as pawnbrokers when this rule took effect.

(a)CA Financial Code § 21304(a) As a condition precedent to the issuing of a pawnbroker’s license, the applicant shall file with the issuing authority a financial statement confirming that the applicant has at least one hundred thousand dollars ($100,000) in the form of liquid assets readily available for use in each licensed business for which the application is made, not including real property, or, in the absence of one hundred thousand dollars ($100,000), an applicant may post a nonrevocable surety bond in the amount of one hundred thousand dollars ($100,000) or the applicant may, in lieu of posting a surety bond, deposit money, certificates, accounts, bonds, or notes, as provided in Section 995.710 of the Code of Civil Procedure. The financial statement shall be filed by the applicant under penalty of perjury and signed by a California certified public accountant verifying that he or she has reviewed the financial statement.
(b)CA Financial Code § 21304(b) This section does not apply to any person holding a secondhand dealer’s license pursuant to Section 21641 or 21642 of the Business and Professions Code who is actively engaged as a pawnbroker on the effective date of this section.
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(Amended by Stats. 1997, Ch. 17, Sec. 40. Effective January 1, 1998.)

Section § 21305

Explanation

If you have a license under this chapter, you cannot sell or give it to someone else. It must remain with the original holder.

A license issued pursuant to this chapter shall not be transferred or assigned.
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(Added by Stats. 1993, Ch. 782, Sec. 4. Effective January 1, 1994.)

Section § 21306

Explanation

If you're a pawnbroker with a license under Section 21300, you don't need additional licenses usually required for secondhand dealers under Sections 21641 and 21642. However, you must still follow all the other rules that apply to secondhand dealers.

A pawnbroker licensed under Section 21300 is exempt from the licensing requirements under Sections 21641 and 21642 of the Business and Professions Code and may engage in any transaction involving tangible personal property for which a secondhand dealers license is required under Sections 21641 and 21642 of the Business and Professions Code. Pawnbrokers operating under this license exemption are required to conform to all other requirements of secondhand dealers for which a license is required under Sections 21641 and 21642 of the Business and Professions Code.
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(Added by Stats. 1993, Ch. 782, Sec. 4. Effective January 1, 1994.)

Section § 21307

Explanation

If a person either knows or should reasonably know that they are breaking a rule in this chapter, it is considered a misdemeanor unless it's specifically stated otherwise.

Except as otherwise specifically provided, the violation of any provision of this chapter under circumstances where a person knows or should have known that a violation was being committed is a misdemeanor.
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(Added by Stats. 1996, Ch. 923, Sec. 12. Effective January 1, 1997.)