Chapter 5.56
PAWNBROKERS
Sections:
5.56.030 Licensing requirements.
5.56.050 Acceptable identification.
5.56.060 Information on receipt.
5.56.070 Maximum charges by pawnbrokers—Commissions void.
5.56.080 Intermediate payments—Receipts.
5.56.100 No offsets or deficiency permitted.
5.56.120 Hold order by police.
5.56.130 Unlawful transactions.
5.56.150 Accepting lost or stolen articles.
5.56.160 Notice to police department of stolen items.
5.56.170 Authority to deny issuance of license.
5.56.180 Suspension or revocation.
5.56.190 Additional regulations.
5.56.010 Legislative intent.
The City Council, having considered the nature of pawnbrokering businesses within the city and their relation to the municipal welfare and to the expenditures required by the city, and having further considered the necessity for proper regulation of the same, and all matters proper to be considered in relation thereto, finds, determines, and declares that the regulations imposed upon each pawnbrokering operation as defined in this chapter are reasonable, proper, and nondiscriminatory and are necessary for a just and proper regulation of such businesses and occupations. (Ord. 2001-8 § 1 (part))
5.56.020 Definitions.
For purposes of this chapter, the following words and terms shall have the meanings ascribed to them as follows:
“Contract for purchase” means a contract entered into between a pawnbroker and a customer pursuant to which money is advanced to the customer by the pawnbroker on the delivery of tangible personal property by the customer on the condition that the customer, for a fixed price and within a fixed period of time not to exceed ninety (90) days, has the option to cancel such contract.
“Fixed price” means the amount agreed upon to cancel a contract for purchase during the option period.
“Fixed time” means that period of time, not to exceed ninety (90) days, as set forth in a contract for purchase for an option to cancel such contract.
“Option” means the fixed time and the fixed price agreed upon by the customer and the pawnbroker in which a contract for purchase may be but does not have to be rescinded by the customer.
“Pawnbroker” means a person regularly engaged in the business of making contracts for purchase or purchase transactions.
“Pawnbrokering” means the business of a pawnbroker.
“Purchase transaction” means the purchase by a pawnbroker, in the course of pawnbrokering, of tangible personal property for resale, other than newly manufactured tangible personal property which has not previously been sold at retail, when such purchase does not constitute a contract for purchase.
“Tangible personal property” means all personal property other than those in action, securities or printed evidences of indebtedness, which property is deposited with or otherwise actually delivered into the possession of a pawnbroker in the course of his business in connection with a contract for purchase or purchase transaction. (Ord. 2001-8 § 1 (part))
5.56.030 Licensing requirements.
A. No person shall engage in pawnbrokering without first obtaining a pawnbrokering license and paying all required fees. The City Council shall be the licensing authority for each pawnbrokering license.
B. Every person required to obtain a pawnbrokering license shall make application for such license to the licensing authority, upon forms provided by the licensing authority, and shall state under oath or affirmation such facts and provide such additional information and documents as reasonably requested by the licensing authority. It is unlawful for any person to make any false statement or representation in connection with an application for a license.
C. No license shall be issued to any applicant until all fees required by the code have been paid in full. Each license shall state the type of the business, name and address of the licensee, and the issuance and expiration dates.
D. The licensing authority shall not act on any license application which is incomplete. Any such application shall be returned to the applicant for completion and resubmittal.
E. The licensing authority shall not grant any license under this section until the authority has received written verification from the applicable city departments, including but not limited to the police and fire departments, that the applicant is in compliance with the applicable requirements of this Code. Within ten days after receiving notification from the applicable city department that the applicant is not in compliance with any such requirements, the licensing authority shall notify the applicant in writing of the same.
F. As used in this section, the applicant shall include each individual applicant, each partner of a partnership if the applicant is a partnership, each officer, director, and holder of ten percent or more of the corporate stock of a corporation if the applicant is a corporation, and each manager of an applicant.
G. For each initial application, and each renewal application if required by the licensing authority, the Police Department shall conduct a criminal history check of the applicant, and each of the following, as applicable:
1. The individual making the application, if a sole proprietorship;
2. Each spouse, if a husband-wife partnership;
3. Each officer and director, if a corporation;
4. Each partner, if a partnership;
5. Each member and manager, if a limited liability company; and
6. Each Principal, Chief Administrative Official, or other responsible party, if any other type of entity.
H. Each application for a license under this section shall be verified and acknowledged under oath to be true and correct as follows:
1. If the applicant is an individual or sole proprietorship, by the individual or sole proprietorship;
2. If the applicant is a husband-wife partnership, by each spouse;
3. If the applicant is a partnership, by at least one (1) general partner;
4. If the applicant is a corporation, by the president of the corporation;
5. If the applicant is a limited liability company, by at least one manager of the company; or
6. If the applicant is any other organization or association, by the Chief Administrative Official.
1. Each applicant for a license under this section shall provide the following information on forms furnished by the licensing authority:
1. The legal name and residence of the applicant.
2. Whether the applicant or the applicant’s spouse has any financial interest in any other operation doing the same type of business as that for which the license is sought.
3. The age and date of birth of the applicant.
4. Whether the applicant has ever been convicted or pled guilty or no contest to any crime constituting a felony, or any crime not a felony involving moral turpitude and, if so, a complete description of each such crime, including date of violation, date of conviction, jurisdiction and any disposition, including any fine or sentence imposed and whether terms of disposition have been fully completed.
5. Address of the premises to which the license applies.
6. Whether the premises are owned or rented and, if the applicant has a right to legal possession of the premises, a copy of those documents giving such legal right.
7. If the applicant is a person doing business under a trade name, a copy of the trade name properly recorded. If the applicant is a corporation, a copy of authority to do business in Colorado, including articles of incorporation, agent for service of process, trade name affidavit, if any, and last annual report, if any.
8. Business or employment records of the applicant.
9. Such other information as reasonably required by the licensing authority to determine compliance with the city code.
J. Each applicant shall be photographed and fingerprinted by the police department, shall provide a release for the completion of a full background investigation, and shall furnish three letters of character reference from individuals residing in the metropolitan area. An application is not properly completed until the requirements of subsection (d) have been fully satisfied.
K. Upon receipt of a properly completed application, as determined by the licensing authority, the payment in full of the application and license fee, and verification of compliance with the other requirements of this code, the licensing authority shall refer the application to the police department for investigation of the background, character, and financial responsibility of each applicant.
L. The police department shall furnish the results of such investigation to the licensing authority.
M. Each applicant for a license under this section shall pay a non-refundable application fee of five hundred dollars ($500.00) at the time of filing an application.
N. It is a condition of each pawnbrokering license that the licensee shall:
1. Furnish a bond to the city in the amount often thousand dollars ($10,000.00), conditioned on the applicant’s faithful observance of all of the provisions of the ordinances of the city and the statutes of the state of Colorado, the faithful performance of the duties required by said ordinances and statutes, and the safekeeping and return of all articles held in pledge by the applicant as required by said ordinances and statutes; and
2. Furnish to the city copies of insurance policies providing property insurance coverage and general liability insurance coverage. Such policies shall be subject to review and approval by the city. Such insurance coverage shall apply to all premises and operations pertaining to the pawnbrokering business.
O. The annual fee for a pawnbrokering license shall be one thousand dollars ($1,000.00)
P. An application for renewal of a license under this section shall be considered in the same manner as an original application, except that a full investigation to ascertain compliance with the provisions of the city code shall not be required more than every fifth year following the year in which the license was initially issued, unless deemed necessary by the Police Department.
Q. The renewal application and fee must be received within thirty (30) days prior to expiration of the existing license. Any applicant who fails to submit the renewal application and fee to the licensing authority within the required time shall be subject to additional fees payable in the following amounts: an additional twenty-five (25) percent of the license fee required for such license for the first fifteen (15) days that such license fee remains unpaid, and thereafter, the license fee shall be that required for such license in this title, plus an additional sum equal to fifty percent (50%) of such fee.
R. No license issued under this section shall be transferable.
S. No licensee under this section shall move its place of business without first notifying the licensing authority. The licensing authority may investigate the change of address for compliance with this title and shall include the change upon the license if the change is in compliance with this title.
T. In the event of a change in managers, disclosure thereof shall be made to the city, and the new manager shall be photographed and fingerprinted, shall furnish reference letters, shall be investigated as required in this chapter, and shall otherwise comply with the provisions of this chapter including, without limitation, the payment of the investigation processing fee of two hundred dollars ($200.00).
U. Each license issued under this section shall be posted on the licensed premises in a conspicuous location open to public view. It is unlawful to display any expired or duplicate license. (Ord. 2001-8 § 1 (part))
5.56.040 Records.
A. Each pawnbroker shall keep a numerical register in which shall be recorded:
1. The time and date of each purchase and contract for purchase transaction;
2. An accurate description of the article, including all serial and identification numbers;
3. The time and date of receiving such article;
4. The name, address, date of birth, fingerprint, and physical description of each customer, and the customer’s driver’s license number or other identification number from such sources permitted by Section 5.56.050; and
5. A declaration of ownership signed by the customer.
B. Where there exists a contract for purchase, the register shall also contain the number of the contract, the date it is due, the length of the loan, the date the article is sold, the amount of the sale, and the name and address of the purchaser.
C. Each pawnbroker shall make available the records required in paragraph A and B of this section, and the articles obtained by the pawnbroker, for inspection at all reasonable times by any representative of the Police Department.
D. Each pawnbroker shall maintain the records required by this section for a minimum of three (3) years. (Ord. 2001-8 § 1 (part))
5.56.050 Acceptable identification.
No pawnbroker, or any principal, employee, agent or servant of the pawnbroker, shall engage in a purchase transaction or shall enter into a contract for purchase with any customer without first securing adequate identification from the customer. The type and kind of identification shall be limited to the following:
A. Colorado driver’s license;
B. Identification card issued in accordance with Section 42-2-302 C.R.S., which is an identification card issued by the state of Colorado;
C. A driver’s license containing a picture issued by another state;
D. An identification card containing a picture issued by another state;
E. A military identification card;
F. A passport;
G. An alien registration card;
H. A nonpicture identification document issued by a state or federal government entity, together with a clear photograph of the customer taken at the time of the transaction; or
I. Verification of identification of the customer from an identification-information aggregation service approved by Chief of Police. (Ord. 2017-4 § 1: Ord. 2001-8 § 1 (part))
5.56.060 Information on receipt.
At the time of receiving tangible personal property and upon the subsequent renewal of any contract of purchase, the pawnbroker shall deliver to the customer a receipt which is correspondingly serially numbered to the numerical register. The receipt shall contain the substance of the information required to be kept in the records prescribed in this chapter. (Ord. 2001-8 § 1 (part))
5.56.070 Maximum charges by pawnbrokers—Commissions void.
A. No pawnbroker shall request or receive any greater amount of interest, commission, or compensation than the total rate or amount allowed by state law. No pawnbroker may impose or collect any other charge upon the renewal of any contract for purchase or at any other time.
B. All contracts for the payment of a commission by the borrower for procuring a contract for purchase on tangible personal property are void. A borrower who has paid such a commission may recover in a civil action two (2) times the amount paid, plus costs and reasonable attorney fees. (Ord. 2001-8 § 1 (part))
5.56.080 Intermediate payments—Receipts.
The pawnbroker shall accept intermediate payments, without penalty, upon contracts for purchase which have not matured when presented with the receipt, and shall treat the amount tendered as a payment upon the existing contract. A receipt indicating the date of the payment and the amount thereof shall be provided for all moneys received on account of or in payment of the contract for purchase. The amount of money presented shall be applied in total against the amount of indebtedness. In no event shall any late charges, collection fees or other such service charges be deducted from the amount of the payment tendered to the pawnbroker. (Ord. 2001-8 § 1 (part))
5.56.090 Holding period.
The pawnbroker shall retain the unredeemed articles in the pawnbroker’s possession on the licensed premises for not less than forty-five (45) days from the date of the initial possession and control of the articles by the pawnbroker pursuant to a purchase transaction or a contract for purchase. (Ord. 2001-8 § I (part))
5.56.100 No offsets or deficiency permitted.
The pawnbroker shall have a claim to the article only for payment of the debt, and in no event shall the pawnbroker have claim to the personal credit of the customer. No deduction or counterclaim shall be allowed the pawnbroker against a surplus or deficiency arising out of another contract for purchase between the pawnbroker and the customer. In no event shall any money due the pawnbroker by the customer be collected by the pawnbroker; and in the event that such an attempt is made, the entire transaction shall be void. (Ord. 2001-8 § 1 (part))
5.56.110 Investigation.
A. For purposes of discovering violations of this chapter, any ordinance of the city or of state or federal law, any representative of the police department may at any time investigate the business and examine the books, accounts, papers, documents and records used therein of:
1. Any pawnbroker in respect to such books, accounts, papers, documents and records required to be kept hereunder;
2. Any other person who engages in the business of a pawnbroker or who participates in such business as principal, agent, broker, or otherwise; and
3. Any person who the department has reasonable cause to believe is violating or is about to violate any provision of this chapter, whether or not such person shall claim to be within the authority or beyond the scope of this chapter.
B. The Police Department’s representatives shall have and be given full access to the offices and places of business, books, accounts, papers, documents, records, files, safes and vaults of all such persons and shall require the attendance of and examine any person relative to such purchase or contract for purchase transactions or such business or to the subject matter of any investigation, examination, or hearing.
C. To defray the cost of investigating and discovering violations of this chapter, each pawnbroker shall the city pay a fee of ten dollars ($10.00) for each purchase transaction or contract for purchase made or entered into by the pawnbroker. Such fee calculated by the city based upon the register maintained pursuant to this chapter, subject to reconciliation based on the books and records of the pawnbroker, and shall be paid over within thirty (30) days after an invoice therefor is issued by the city. (Ord. 2001-8 § 1 (part))
5.56.120 Hold order by police.
Any representative of the Police Department may order a pawnbroker to hold any article deposited with the pawnbroker for a reasonable period of time if the department has a reasonable belief that the article is stolen. A pawnbroker who receives such a hold order shall not sell or dispose of the article or allow it to be redeemed as long as the hold order remains in effect. (Ord. 2001-8 § 1 (part))
5.56.130 Unlawful transactions.
It shall be unlawful for any pawnbroker to engage in any purchase transaction or enter into any contract for the sale or purchase of tangible goods:
A. Where the subject matter or any portion of the transaction includes the pawning or sale of weapons of any kind, including but not limited to any explosives or incendiary device, ballistic knife, gravity knife, switchblade knife, blackjack, firearm, gas gun, or stun gun as defined in C.R.S. Section 18-12-101.
B. With any person under eighteen (18) years of age;
C. With any person who the pawnbroker knows or has reason to believe has been convicted of burglary, robbery, felony theft, or theft by receiving; or
D. With any person who appears to be under the influence of alcohol or any controlled substance, as defined in state law. (Ord. 2001-8 § 1 (part))
5.56.140 Hours.
It is unlawful for any pawnbroker to be open for business, or to operate any establishment in which the business of pawnbroking is carried on, after 9:00 p.m. each day and before 7:00 a.m. the following day. (Ord. 2001-8 § 1 (part))
5.56.150 Accepting lost or stolen articles.
A pawnbroker who accepts any article in a purchase or contract of purchase transaction from a customer who is not the owner thereof obtains no title in the article either by reason of the expiration of the contract or by transfer of the receipt to the pawnbroker by the customer or holder thereof. Ignorance of the fact that the article was lost or stolen shall not be construed to affect the question of title. If the pawnbroker sells such article to a third person, the pawnbroker shall remain liable to the original owner in an action to recover the article. Upon proof of ownership of the article lost or stolen, the lawful owner may claim the same from the pawnbroker or recover the same by appropriate legal means including, without limitation, forfeiture of the fair market value of such article out of the bond required by this chapter. (Ord. 2001-8 § 1 (part))
5.56.160 Notice to police department of stolen items.
A. If any person attempts to establish a contract for purchase or sell to a pawnbroker any item which the pawnbroker has reason to believe has been stolen, it shall be the duty of the pawnbroker to notify the police department, within twenty-four (24) hours after such attempt is made, and provide a description of the person making such attempt and the article that such person attempted to contract or sell. If a pawnbroker could reasonably have had knowledge that the items contracted for or sold were stolen or obtained in any other unlawful manner, then it shall be unlawful for such pawnbroker to fail to notify the Police Department as required herein.
B. The pawnbroker shall report the loss or theft of any weapon from the licensed premises to the police department within eight (8) hours of discovery of such loss or theft. For the purpose of this section, “weapon” shall mean any handgun, long gun, assault rifle, air rifle, shotgun, spring-operated gun, crossbow, recurve bow or hunting knife. (Ord. 2001-8 § 1 (part))
5.56.170 Authority to deny issuance of license.
A. The licensing authority may deny an applicant a license under this chapter for cause. Cause for the denial of a license shall include but not be limited to the following:
1. The applicant has failed to supply the required information;
2. The applicant has failed to pay the required license fee in full;
3. The applicant has failed to obtain the required approval of the applicable city departments;
4. The applicant has had any business license revoked or suspended in the year immediately preceding the date of application;
5. The applicant has failed to obtain any required bond or insurance;
6. The applicant has otherwise failed to meet one or more of the requirements for the license for which the applicant has applied;
7. The applicant has been convicted or pled guilty or no contest to any violation of this chapter pertaining to the license, to any crime constituting a felony, or to any crime not a felony but involving moral turpitude including but not limited to any offense involving dishonesty, fraud, deceit, sexual assault, or prostitution; or the applicant is otherwise not of such character as to reasonably assure that the operations will be conducted lawfully and in a manner which will not be detrimental to the public health, safety, and welfare. In considering any conviction, the licensing authority shall be guided by the provisions of C.R.S. § 24-5-101; or
8. The applicant has made any false statement or representation on the application for the license.
B. If the licensing authority denies a license, the licensing authority shall notify the applicant in writing, stating the specific grounds for denial.
C. An applicant may appeal the licensing authority’s decision to the City Council. To appeal, an applicant must, in writing within ten (10) days after the postmarked date of the licensing authority’s decision denying such application, notify the city council and request a hearing.
D. If the applicant has paid the license fee but no license is issued, the licensing authority shall refund the license fee, less an administrative fee of twenty-five dollars ($25.00). (Ord. 2001-8 § 1 (part))
5.56.180 Suspension or revocation.
A. Any license issued under this chapter may be suspended or revoked, for cause, by the licensing authority following the filing of a complaint and request for suspension or revocation by any city department. No license shall be suspended or revoked until after written notice to the licensee is given and the opportunity for a hearing before the licensing authority.
B. The licensee shall file a written request for hearing with the licensing authority within ten (10) days after the postmarked date of the written notice referred to in subsection A of this section. If a timely request is not filed, the suspension or revocation shall become effective, as requested by the department, on the eleventh day after the postmarked date of said written notice.
C. If a timely request is filed, the licensing authority shall schedule and hold a hearing on the complaint and request for suspension and revocation and shall issue a written decision and order granting or denying the request, or granting the request with conditions, within thirty (30) days from the date of the hearing; except that the decision date may be extended by written order of the licensing authority. In the authority’s discretion, the hearing and decisionmaking responsibilities of this subsection may be assigned to an independent hearing officer retained by the authority.
D. A party to the hearing provided for in subsection C shall have the right to appeal the decision to the City Council. The appealing party shall file a written appeal with the licensing authority within ten (10) days after the postmarked date of the decision. The City Council shall not have jurisdiction to consider any appeal that was not filed in a timely manner.
E. The appeal shall be decided by the Council not later than thirty (30) days from the filing of the appeal; except that the council may, by motion, extend the decision date.
F. The appellant shall be notified of the Council’s decision in writing within fifteen (15) days after the date of the decision.
G. The appeal shall be limited to a review by the Council of the evidence presented at the hearing before the Licensing Authority or the authority’s Hearing Officer and a determination as to whether, on the basis of said evidence, the decision should be affirmed, reversed, or modified.
H. No application or license fees paid by a licensee whose license has been suspended or revoked shall be refunded. No licensee whose license has been revoked shall be eligible to apply for a new license for the same trade, profession, business, occupation, or privilege for a period of one (1) year after such revocation.
I. The term “cause,” as used in this chapter, except where otherwise specified, includes the doing or omitting of any act, or permitting any condition to exist in connection with any trade, profession, business, occupation or privilege for which a license is granted under the provisions of this chapter or upon any premises or facilities used in connection therewith, which act, omission, or condition is:
1. Contrary to the health, safety, or welfare of the public;
2. Unlawful, irregular, or fraudulent in nature;
3. Unauthorized or beyond the scope of the license granted;
4. Prohibited by the provisions of this chapter or any duly established rule or regulation of the city applicable to the trade, profession, business, occupation or privilege for which the license has been granted;
5. In violation of the Code; or
6. In violation of any law, rule, or regulation of the city, the county, the state, or the federal government.
J. Nothing in this section shall be deemed to prohibit the city from imposing other penalties authorized by the Code for any violation thereof, or seeking any other relief as is available to the city, including but not limited to filing a summons and complaint in the municipal court. (Ord. 2001-8 § 1 (part))
5.56.190 Additional regulations.
The licensing authority may make such additional rules and regulations not in conflict with this chapter as necessary for the administration and enforcement of this chapter, including required forms and requirements for additional reports. (Ord. 2001-8 § 1 (part))