Chapter 5 · Business Regulations

Article 2. Pawnbrokers

Sections 5-201 to 5-214 · 14 sections

5-201 Definitions.

As used in this article the words:

(a)Pawnbroker — shall mean any person who loans money on deposit or pledge of personal property or valuable thing, other than intangible personal property, or a person that deals in the purchase of personal property on condition of selling the same back again at a stipulated price, but such term shall not include any person operating under the supervision of the State Banking Commissioner, Credit Union Commissioner, or the Consumer Credit Commissioner of the State of Kansas.

(b)Person — shall mean any individual, firm, company, partnership, corporation, or association of persons.

(Code 1984)

5-202 License required.

No person shall engage or continue in business as a pawnbroker without first obtaining a license therefor. He or she shall obtain such license from the city clerk. An application for such license shall be in writing and shall state the full name and place of residence of the applicant, or if the applicant be a partnership of each member thereof, or, if a corporation or association, of each officer, shareholder, or member thereof, together with the address of the place or places where the business is to be conducted, and the hours of the day and days of the week during which the applicant proposes to engage in the business of pawnbroking at each such place, and such other information as may be necessary to determine the applicant’s qualifications for a license in accordance with the provisions of this article. Each applicant also shall submit with his or her application:

(a)A statement that he or she is the holder of a valid registration certificate issued by the Director of Revenue pursuant to K.S.A. 79-3608 for each place of business for which application for a license is made; and

(b)A detailed inventory and description of all goods, wares, merchandise or other property held in pawn or for sale at the time of the application at each place of business stated therein, indicating whether the same was received in pawn or purchased as second-hand merchandise.

The application shall be in a form approved by the attorney general. Each application shall be accompanied by a fee of $25, which fee shall be paid annually upon renewal of the license. All such fees received by the city clerk shall be deposited in the city general fund.

(Code 1983)

5-203 Qualifications.

No license or any renewal thereof shall be granted to:

(a)Any person who is not a citizen of the United States;

(b)Any person who has not been an actual resident of the State of Kansas for at least two years immediately preceding the date of his or her application;

(c)Any person who has been convicted of or has pleaded guilty to a felony under the laws of this state, or any other state, or of the United States, or shall have forfeited his or her bond to appear in court to answer charges for any such offense within the 10 years immediately prior to such person’s application for a license;

(d)Any person who has had his or her license revoked for cause under the provisions of this article;

(e)Any person who is not at least 21 years of age;

(f)Any person who at the time of application for renewal of any license issued hereunder would not be eligible for such license upon a first application;

(g)Any person who does not own the premises for which a license is sought, unless he or she has a written lease therefor for at least three-fourths of the period for which the license is to be issued;

(h)Any person whose spouse would be ineligible to receive a license hereunder for any reason other than the age, citizenship, and residence requirements;

(i)Any partnership, unless all the partners shall be eligible to receive a license as an individual; and

(j)A corporation if any officer, manager, director, or stockholder would be ineligible to receive a license as an individual.

(Code 1984)

5-204 Transfer of ownership.

It shall be unlawful for any shareholder of a corporate licensee to transfer any stock in the corporation to any person who would be ineligible to receive a license as an individual, and any such transfer shall be null and void; Provided, that if any such stockholder of a corporate licensee shall become deceased, and his or her heirs or devisees to whom such stock descends by descent and distribution or by will shall be ineligible to receive a license hereunder, then the legal representatives of the deceased stockholder’s estate, his or her heirs and devisees shall have 14 months from the date of the death of the stockholder within which to sell such stock to a person eligible to receive a license hereunder, with such sale to be made in accordance with the provisions of the probate code and any amendments thereto. If the legal representative, heirs, and devisees shall fail, refuse or neglect to so convey the stock within the time hereinbefore prescribed, then the stock shall revert to and become the property of the corporation, for which the corporation shall pay the legal representatives heirs or devisees the book value of such stock. If the stock in any corporation shall be the subject of any trust heretofore or hereafter created, the trustee or trustees and the beneficiaries of each trustee and beneficiary of said trust who is 21 years of age or older must be a person who would be eligible to receive a license or the trustee shall be and he or she is hereby authorized and required within 14 months after the effective date of the trust to sell the stock to a person eligible to receive a license under this article and he or she shall hold and disperse the proceeds thereof in accordance with the terms of the trust or the license of the corporation shall be forfeited.

During the 14 month period hereinbefore mentioned a corporation shall not be denied a license or have its license revoked if it meets all of the other requirements necessary to have a license as provided in this article.

(Code 1984)

5-205 License, posted.

The document or other instrument evidencing the license of a pawnbroker shall state the address at which the business is to be conducted and shall state fully the name of the licensee. If the licensee is a partnership, the names of the members thereof shall be stated, and if a corporation, the date and place of its incorporation, and the names of all the shareholders thereof. Such license shall be kept conspicuously posted in the place of business of the licensee. It shall not be transferrable or assignable. Not more than one place of business shall be maintained under the same license, but more than one-li cense may be issued to the same licensee upon compliance with all the provisions of this article governing the issuance of an initial license.

(Code 1984)

5-206 Change of business location.

Whenever a licensee shall change his or her place of business to another location within the city, he or she shall immediately given written notice thereof to the city clerk who shall then issue a duplicate license which shall show in addition to all the information appearing on the old license a record of the change of location and the date thereof, which new license shall be authority for the operation of such business under such license at such location. The licensee shall return the old license to the city clerk as soon as the new license has been received and the change in location has taken place.

(Code 1984)

5-207 Records and accounts.

Each licensee shall keep and use in his or her business such books, accounts, and records as will enable the city to determine whether such licensee is complying with the provisions of this article. The city may examine the books, accounts, records and files used by any such licensee or by any other person engaged in the pawnbroking business, irrespective of whether such person, partnership or corporation shall act or claim to act as principal, agent or broker, or under or without authority of this article. The duly designated representatives of the city, including all city law enforcement officials, shall have and be given free access to all such books, accounts, papers, records, files, safes and vaults.

(Code 1984)

5-208 Suspension or revocation of license.

Any license issued under this article may be suspended or revoked after due notice the public hearing before the governing body if the licensee:

(a)Failed to pay the annual license fee;

(b)Violated any provision of this article; or

(c)Convicted of or has pleaded guilty to a felony under the laws of this state, or any other state, or the United States, or shall have forfeited his or her bond to appear in court to answer charges for any such offense, if such conviction or plea occurred subsequent to or within the 10 years immediately prior to the date of the licensee’s application for the license. Any license issued under this article shall be revoked, after due notice and hearing thereon, if it shall be proved at the hearing that the licensee sold any handgun to a minor.

The hearing herein provided shall be held within 30 days after notice thereof and the alleged violation determined by written order of the governing body within 60 days after such hearing is concluded; but no revocation or suspension or surrender of any license shall impair or affect the obligation of any pre-existing lawful contract between the licensee and any borrower.

(Code 1984)

5-209 Loan procedures.

Every loan made by a pawnbroker for which goods are received in pledge of security shall be evidenced by written contract, in ink, a copy of which shall be furnished to the borrower. The loan contract shall set forth the loan period, which shall be one month, the date on which the loan is due and payable and the charges, and it shall clearly inform the borrower of his or her right to redeem the pledge during the redemption period of two months after due date. Except as otherwise provided herein, the holder of any such contract shall be presumed to be the person entitled to redeem the pledge, and the pawnbroker shall deliver the pledge to the person presenting the contract, upon payment of the principal and charges.

Every pawnbroker shall retain in his or her possession, after the date on which the loan became due and payable every article pledged to him or her for a redemption period of two months. During such period, the borrower may redeem the pledged article, upon payment of the principal and charges. It shall be unlawful for any pawnbroker to sell or transfer title or possession of any pledged property until the expiration of such period of redemption. If any pledged article is not redeemed within the redemption period, the pawnbroker shall become vested with all right, title, and interest of the pledger or his or her assigns to such pledged article, to hold and dispose of his or her own property. Any other provision of law relating to the foreclosure and sale of pledges shall not be applicable to any pledge the title to which is transferred in accordance with this section.

(Code 1984)

5-210 Reporting.

Every pawnbroker shall report the description of all property received in pawn or purchased as second hand merchandise, in whatever quantity received, including property purchased as secondhand merchandise at whole, secondhand merchandise taken in for sale or possessed on consignment for sale, and secondhand merchandise taken in trade; provided, that no such report need be made concerning property or merchandise acquired from another pawnbroker licensed in the State of Kansas in a transaction involving the purchase or other acquisition from the other pawnbroker of his or her stock and trade, or a substantial part thereof in bulk, where the other pawnbroker has made the reports required by this section with respect to such property or merchandise. If any such transaction takes place within the city, the report shall be submitted to the chief of police thereof; and if any such transaction takes place outside the territorial limits of the city, the report shall be submitted to the sheriff of the county.

(Code 1984)

5-211 Pawn book.

At the time of any transaction a pawnbroker shall enter in a pawn book kept by him or her for that purpose, the date, duration, amount and charges of every loan made by him or her, an accurate description of the property pledged and the name and residence address of the pledger.

(Code 1984)

5-212 Minors prohibited.

No person shall receive in pawn or as security for any loan, transfer, service, undertaking, or advantage anything of value from any person under the age of 18 years of age.

(Code 1984)

5-213 Right of entry.

Law enforcement officers of the city or county shall have access during regular business hours to the place of business of any pawnbroker conducting business in the city or county. Access shall be for the purpose of periodically inspecting property pledged or purchased in the transaction of the business of the pawnbroker, and records relating to those transactions, to determine if the pawnbroker is complying with the provisions of this article and the laws of Kansas.

(Code 1984)

5-214 Charges.

(a)On the effective date of this article no pawnbroker shall contract for, charge, or receive directly or indirectly on or in connection with any pawnbroker transaction any charges, whether for interest, storage, insurance, service fee, handling, compensation, consideration or expense which in the aggregate are greater than the charges provided and authorized by this article. Any other provisions of law relating to interest, storage, and such charges shall not be applicable to any pawnbroker transaction made in accordance with this article.

(b)Whenever any loan is made by a pawnbroker for which goods are received in pledge, the following maximum amounts may be charged:

(1)On any amount a charge may be added in an amount not to exceed 10% per month or 120 percent per annum of the amount advanced to the borrower, and

(2)The maximum amount of a loan authorized by this article shall not exceed $300 per transaction.

(c)The term of any loan made under the provisions of this article shall be one month. Loans may be extended or renewed by the payment of charges herein provided monthly. The charges authorized herein shall be deemed to be earned at the time the loan is made and not be subject to refund. On loans under this article, no insurance charges or any other charges of any nature whatsoever shall be permitted.

(Code 1984)