Session of 1998
SENATE BILL No. 537
By Committee on Financial Institutions and
Insurance
1-28
9
AN ACT concerning pawnbrokers; interest rate;
inspection by consumer
10 credit commissioner as
to compliance of records; amending K.S.A. 16-
11 712, 16-715, 16-718,
16-719 and 16a-1-202 and repealing the existing
12 sections.
13
14 Be it enacted by the Legislature of the
State of Kansas:
15 Section 1. K.S.A.
16-712 is hereby amended to read as follows: 16-
16 712. Each licensee shall keep and use in
the licensee's business such
17 books, accounts and records as will enable
the city or county issuing the
18 licensee's license and the consumer
credit commissioner to determine
19 whether such licensee is complying with the
provisions of this act. Any
20 such city or county or the
commissioner may examine or cause to be
21 examined the books, accounts, records and
files used by any licensee or
22 by any other person engaged in the business
of pawnbroking or dealing
23 in precious metals, irrespective of whether
such person acts or claims to
24 act as principal, agent or broker, or under
or without authority of this act.
25 The duly designated representatives of the
city or, county or consumer
26 credit commissioner shall have and
be given free access to all such books,
27 accounts, papers, records, files, safes and
vaults. The consumer credit
28 commissioner shall have the power and
authority to assess and collect
29 reasonable fees set by the consumer
credit commissioner and enforce rem-
30 edies and penalties afforded in K.S.A.
16a-1-101 through 16a-6-414 and
31 amendments thereto.
32 Sec. 2. K.S.A.
16-715 is hereby amended to read as follows: 16-715.
33 (a) On or before Tuesday of each week, or
at more frequent intervals if
34 required by city ordinance or county
resolution, every pawnbroker or
35 precious metal dealer shall report the
description of all property received
36 in pledge or purchased as a pawnbroker or
precious metal dealer during
37 the preceding calendar week, in whatever
quantity received. Such report
38 shall include all property purchased as
secondhand merchandise at whole-
39 sale, secondhand merchandise taken in for
sale or possessed on consign-
40 ment for sale and secondhand merchandise
taken in trade. No such report
41 need be made concerning property or
merchandise acquired from an-
42 other pawnbroker or precious metal dealer
licensed in this state in a
43 transaction involving the purchase or other
acquisition from the other
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1 pawnbroker or precious metal dealer
of the other pawnbroker's or
2 dealer's stock in trade, or a
substantial part thereof in bulk, where the
3 other pawnbroker has made the reports
required by this section with
4 respect to such property or
merchandise.
5 (b) If a
transaction required to be reported under this section takes
6 place within the territorial limits
of a city of the first or second class, the
7 report shall be submitted to the
chief of police of the city. If the trans-
8 action takes place outside the
territorial limits of any such city, the report
9 shall be submitted to the sheriff of
the county in which the transaction
10 takes place.
11 (c) All reports made
pursuant to this section shall comply with and
12 be submitted in accordance with the terms
of any applicable city ordi-
13 nances or county resolutions or orders
of the consumer credit commis-
14 sioner requiring such reporting.
15 (d) Every precious metal
dealer shall retain in the dealer's possession
16 for a period of 10 days all precious metal
purchased as a precious metal
17 dealer, and such metal shall remain in the
condition in which it was pur-
18 chased. The ten-day period shall commence
on the date that the appro-
19 priate police chief or sheriff receives the
report of its acquisition in com-
20 pliance with this section. If the police
chief or sheriff has probable cause
21 to believe that any precious metal reported
by a dealer has been stolen,
22 the police chief or sheriff may give
written notice to the dealer to retain
23 such metal for an additional period of 15
days. Upon such notice, the
24 dealer shall retain such metal in an
unaltered condition for the additional
25 fifteen-day period unless the police chief
or sheriff notifies the dealer in
26 writing that the waiting period is
terminated at an earlier time.
27 (e) Reports made
pursuant to this section shall be available for in-
28 spection only by law enforcement officers
and county and district attor-
29 neys and their employees, and the
consumer credit commissioner and
30 employees of the commissioner, for
law enforcement purposes.
31 Sec. 3. K.S.A.
16-718 is hereby amended to read as follows: 16-718.
32 Law enforcement officers of a city
or, county or the state shall have
access
33 during regular business hours to the place
of business of any pawnbroker
34 or precious metal dealer conducting
business in ;(tri-stars)e such city or
county
35 or the state. Access shall be for
the purpose of periodically inspecting
36 property pledged or purchased in the
transaction of the business of the
37 pawnbroker or precious metal dealer, and
records relating to those trans-
38 actions, to determine if the pawnbroker or
dealer is complying with the
39 provisions of this act.
40 Sec. 4. K.S.A.
16-719 is hereby amended to read as follows: 16-719.
41 (a) No pawnbroker shall contract for,
charge or receive directly or indi-
42 rectly on or in connection with any
pawnbroker transaction any charges,
43 whether for interest, storage, insurance,
service fee, handling, compen-
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3
1 sation, consideration or expense
which in the aggregate are greater than
2 the charges provided and authorized
by this act. Any other provisions of
3 law relating to interest, storage and
such charges shall not be applicable
4 to any pawnbroker transaction made in
accordance with this act.
5 (b) Whenever any
loan is made by a pawnbroker for which goods are
6 received in pledge:
7 (1) A charge may
be added in an amount not to exceed 10% 5%
per
8 month or 120%
60% per annum of the amount advanced to the
borrower,
9 or an alternative minimum finance
charge of $10 per month; and
10 (2) the amount of the
loan shall not exceed $5,000.
11 (c) The term of any loan
made under the provisions of this act shall
12 be one month. Loans may be extended or
renewed by the payment of
13 the charges herein provided monthly. The
charges authorized herein shall
14 be deemed to be earned at the time the loan
is made and shall not be
15 subject to refund. On loans under this act,
no insurance charges or any
16 other charges of any nature whatsoever
shall be permitted.
17 Sec. 5. K.S.A.
16a-1-202 is hereby amended to read as follows: 16a-1-
18 202. K.S.A. 16a-1-101 through 16a-6-414 do
not apply to:
19 (1) Extensions of credit
to government or governmental agencies or
20 instrumentalities;
21 (2) except as otherwise
provided in the article on insurance (article
22 4), the sale of insurance by an insurer if
the insured is not obligated to
23 pay installments of the premium and the
insurance may terminate or be
24 canceled after nonpayment of an installment
of the premium;
25 (3) transactions under
public utility or common carrier tariffs if a
26 subdivision or agency of this state or of
the United States regulates the
27 charges for the services involved, the
charges for delayed payment, and
28 any discount allowed for early payment;
and
29 (4) except with
respect to disclosure, pawnbrokers licensed and reg-
30 ulated pursuant to statutes of this
state;
31 (5)
(4) transactions covered by the Kansas insurance
premium finance
32 company act. (K.S.A. 40-2601 to
40-2613).
33 New
Sec. 6. (16a-1-203) With respect to disclosure,
pawnbrokers li-
34 censed and regulated pursuant to statutes
of this state shall be subject to
35 the provisions of this act. This section is
supplemental to and a part of
36 the uniform consumer credit code.
37 Sec. 7. K.S.A.
16-712, 16-715, 16-718, 16-719 and 16a-1-202 are
38 hereby repealed.
39 Sec. 8. This act
shall take effect and be in force from and after its
40 publication in the statute book.
41