This chapter shall be known, and may be cited, as the Pawnbroker Education Act.
Chapter 4Pawnbroker Education Act
Section § 21400
This section introduces the Pawnbroker Education Act, which is the official name of this chapter.
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Section § 21401
This law acknowledges the importance of pawnbrokers as they offer short-term loans to people who might not have other borrowing options due to credit issues. These loans often help cover everyday needs.
The Legislature believes that educating pawnbrokers is vital for maintaining high standards and ensuring they follow all relevant laws. To support this, pawnbrokers are encouraged to participate in ongoing professional education.
The Legislature finds and declares all of the following:
(a)CA Financial Code § 21401(a) Pawnbroker businesses provide a valuable source of short-term credit for economically vulnerable consumers and the state’s unbanked population, as everyone who seeks a pawn loan can borrow money regardless of creditworthiness.
(b)CA Financial Code § 21401(b) Individuals who use pawnbroker loans in this state use those loans for, among other things, paying for the necessities of life.
(c)CA Financial Code § 21401(c) The Legislature recognizes that education for licensed pawnbrokers, as defined in this chapter, will ensure the highest standards of conduct and
compliance with state and federal laws applicable to pawnbroker businesses.
(d)CA Financial Code § 21401(d) In order to continuously improve the competence of licensed pawnbrokers, the Legislature encourages all licensees to regularly engage in continuing education related to the profession, as defined in this chapter.
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Section § 21403
This section establishes the California Pawnbroker Education Council, designed to manage specific responsibilities related to pawnbrokers. The council is led by a board and consists of members including representatives from law enforcement associations, the Department of Justice, licensed pawnbrokers, and a licensed attorney.
Board members serve for two years, and the council has the authority to hire staff, make contracts, and create rules to fulfill its duties. It is also responsible for setting fees to cover operational costs.
(a)CA Financial Code § 21403(a) The California Pawnbroker Education Council is hereby established to carry out the responsibilities and duties described in this chapter.
(b)CA Financial Code § 21403(b) The council shall be governed by a board of directors composed of, but not limited to, members who shall be chosen in the following manner:
(1)CA Financial Code § 21403(b)(1) One member shall be a representative of the California Police Chiefs Association or California State Sheriffs’ Association, unless those entities choose not to appoint a member to the council.
(2)CA Financial Code § 21403(b)(2) One member shall be appointed by the Secondhand Dealer and
Pawnbroker Unit of the Department of Justice, unless the department chooses not to appoint a member to the council.
(3)CA Financial Code § 21403(b)(3) Four members shall be licensed pawnbrokers who are California residents selected by a professional society, association, or other entity, the membership of which is composed of licensed pawnbrokers. The professional society, association, or other entity shall have a dues-paying membership in California of at least 200 individuals, have been established in or before 2000, and have bylaws that require its members to comply with a code of ethics.
(4)CA Financial Code § 21403(b)(4) One member shall be a licensed attorney who is a California resident selected by a professional society, association, or other entity described in paragraph (3).
(c)CA Financial Code § 21403(c) Each member of the board of directors shall serve a term of two years.
(d)CA Financial Code § 21403(d) The council may take any reasonable actions necessary to carry out the responsibilities and duties set forth in this chapter, including, but not limited to, hiring staff, entering into contracts, and developing policies, procedures, rules, and bylaws to implement this chapter.
(e)CA Financial Code § 21403(e) The council shall establish fees sufficient to support the functions of the council and to cover the reasonable
costs of administering this chapter.
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Section § 21405
This law requires the development of an educational curriculum specifically for pawnbrokers, with a deadline of January 1, 2026. It mandates at least eight hours of prelicensing education for new applicants and eight hours of continuing education for current licensees or their representatives. The curriculum must cover federal and state laws relevant to pawnbrokers, such as bankruptcy, search and seizure, anti-money laundering, lending laws, and specific state reporting requirements. Additional relevant training can also be included as deemed necessary by the council.
(a)CA Financial Code § 21405(a) The council shall, on or before January 1, 2026, develop and establish a standard course and curriculum in pawnbroker transactions that shall include at least eight hours of prelicensing education to be taken by an applicant for licensure, and eight hours of continuing education to be taken by a licensee or their designated representative.
(b)CA Financial Code § 21405(b) The curriculum established by the council shall meet minimum standards for education in the following areas:
(1)CA Financial Code § 21405(b)(1) Compliance with federal laws applicable to the pawnbroker business, including, but not limited to, bankruptcy, search and seizure, anti-money
laundering, and lending laws.
(2)CA Financial Code § 21405(b)(2) Compliance with state laws applicable to the pawnbroker business (Division 8 (commencing with Section 21000)) and the reporting requirements imposed upon secondhand dealers pursuant to Article 4 (commencing with Section 21625) of Chapter 9 of Division 8 of the Business and Professions Code.
(c)CA Financial Code § 21405(c) The curriculum may include any other training that the council deems to be relevant to the efficient and lawful operation of a pawnbroker business.
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Section § 21407
If you want to offer educational courses for prelicensing or continuing education, you need approval from the council. The council sets the rules on how to apply, and what’s expected in terms of curriculum and facilities. They can approve, deny, or require changes to your course offerings. These rules outline what the courses should cover and the kind of environment they need to be provided in.
(a)CA Financial Code § 21407(a) Individuals, entities, agencies, and associations that propose to offer educational courses that satisfy the prelicensing or continuing education requirements of this chapter shall apply for and obtain the approval of the council.
(b)CA Financial Code § 21407(b) The council shall develop policies, procedures, rules, or bylaws governing the requirements described in this chapter and the process for applying to become, approving, denying the approval of, imposing correction action upon, or withdrawing the approval of, an educational course provider. These policies, procedures, rules, or bylaws shall address topics including, but not limited to, what constitutes an acceptable curriculum and facility
requirements.
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Section § 21409
Starting January 1, 2026, if you're applying for a pawnbroker license or renewing one, you must meet specific educational requirements to receive a certificate from the council.
The council will keep records of your initial and ongoing education for at least two years.
(a)CA Financial Code § 21409(a) Beginning on January 1, 2026, the council shall issue a certificate to an applicant for a pawnbroker license, or a licensee applying for renewal of a pawnbroker license, who has satisfied the educational requirements of this chapter.
(b)CA Financial Code § 21409(b) The council shall maintain records verifying completion of the initial prelicensing education and continuing education for a period of not less than two years.
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Section § 21411
This law section states that the council has no power to approve, deny, revoke, or suspend licenses that are issued under Section 21300.
Nothing in this chapter authorizes the council to approve, deny, revoke, or suspend a license issued pursuant to Section 21300.
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Section § 21413
This law is set to expire on January 1, 2029. After that date, it will no longer be in effect.
This chapter shall remain in effect only until January 1, 2029, and as of that date is repealed.
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