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Help & SupportChapter 4-17: Secondhand Dealer and Pawnbroker License34
The purpose of this chapter is to protect the public health, safety, and welfare by regulating the conduct of persons selling secondhand goods, whether such sellers have title to the goods or sell them on consignment, and the conduct of persons engaged in pawnbroking who make loans based on a pledge of personal property or who purchase personal property under an agreement to sell it back at a certain price. The record-keeping and other regulatory requirements of this chapter are necessary to protect the public against the sale and traffic of stolen goods and to enhance the ability of law enforcement personnel to discover and identify stolen goods. It is the council's intent that the provisions of this chapter licensing pawnbrokers augment, but not conflict with, state law regulating pawnbrokers, 12-56-101 et seq., C.R.S.35
The following terms used in this chapter have the following meanings unless the context clearly indicates otherwise:
"Non-precious scrap metal" means scrap metal other than copper, gold, and silver.
"Pawnbroker" means any person who loans money on the deposit or pledge of personal property, and may include a person who also engages in the sale of new or used merchandise through ordinary channels of trade or who purchases secondhand personal property for resale under the terms of this chapter by acquiring by transfer to such pawnbroker any pawn ticket that such pawnbroker has issued.
"Pawnbroking" means the business of a pawnbroker.
"Pledge" means any article deposited with a pawnbroker as security for a loan in the course of the pawnbroker's business.
"Pledgor" means the person who delivers a pledge into the possession of a pawnbroker; if such person discloses that the person is or was acting for another, "pledgor" means the disclosed principal.
"Secondhand goods" means the following goods other than those sold new at retail:
(a) Cameras, camera lenses, slide or movie projectors, projector screens, flash guns, enlargers, tripods, binoculars, telescopes, microscopes;
(b) Televisions, phonographs, tape recorders, video recorders, radios, tuners, speakers, turntables, amplifiers, record changers, citizens' band broadcasting units and receivers;
(c) Skis, ski poles, ski boots, ski bindings, golf clubs;
(d) Typewriters, adding machines, calculators, computers, portable air conditioners, cash registers, copying machines, dictating machines, automatic telephone answering machines;
(e) Bicycles, bicycle frames, bicycle derailleur assemblies, bicycle hand brake assemblies, other bicycle components; and
(f) Any item of tangible personal property marked with a serial or identification number or whose price to the secondhand dealer as a secondhand article is $50.00 or more, except motor vehicles, ranges, stoves, dishwashers, refrigerators, garbage disposals, boats, airplanes, guns, clothes washers, clothes driers, freezers, mobile homes, sewing machines and non-precious scrap metal.
(a) No person shall operate a secondhand store or a place for buying and selling, including, without limitation, selling on consignment, secondhand goods without first obtaining a license therefor from the city manager under this chapter.
(b) No person shall engage in the business of pawnbroking without first obtaining a license therefor from the city manager under this chapter.
(c) Nothing in this chapter shall be deemed to apply to a garage sale or rummage sale, unless it is held at the same address more than twice per year.
(a) An applicant for a license under this chapter shall apply on forms furnished by the city manager, including, without limitation, the full name of the applicant and the address of the location at which such business is to be conducted and any other information required by the city manager to establish the fitness, financial responsibility, and character required to obtain a license, and shall pay the fee prescribed in section 4-20-17, "Secondhand Dealer and Pawnbroker License Fee," B.R.C. 1981.
(b) An applicant for a pawnbroker license shall also:
(1) Furnish to the city a bond from a surety approved by the city manager in the amount of $5,000.00 to be forfeited if the applicant fails to comply with the requirements of this chapter or if the applicant fails to keep safely or return of all articles pledged to the applicant; and
(2) Provide to the city manager fire and property damage insurance policies upon the property the applicant holds as pledge in the minimum amount of one-half its pledged value in case of fire.
4-17-5 Authority to Deny Issuance of License.
(a) The city manager may deny an application for a license under this chapter upon a finding of any of the conditions prescribed by subsection 4-1-9(a), B.R.C. 1981, or upon a determination that:
(1) The applicant has had any secondhand dealer or pawnbroker license revoked or suspended; or
(2) The applicant has previously failed to comply with this code or any ordinance of the city relating to conducting any secondhand dealer or pawnbroker business licensed by this code.
(b) If the city manager denies a license application under this section, the manager shall follow the procedures prescribed by subsection 4-1-9(b), B.R.C. 1981.
No person licensed under this chapter shall move its place of storing pledged, secondhand, or consigned articles without first having notified the city manager, who shall note the change of address upon the license.
4-17-7 Record of Goods Purchased, Consigned, or Pledged.
(a) Each licensee under this chapter shall keep a bound book in which is written legibly in ink: the time and date of each purchase, consignment, or pledge; an accurate description in English of the article or pledge, including all serial and identification numbers; the time and date of receiving such article or pledge; the name, address, and physical description of each person, including date of birth, as shown on a driver's license or similar identification belonging to the person offering the article or pledge to the licensee; and a declaration of ownership signed by the seller or the pledgor. In the case of a pledge to a pawnbroker, the book shall also contain the amount of the loan, the rate of interest on the loan, the number of the loan, the date it is due, the length of the loan, a notation if the pledge is redeemed, the date notice is sent and published, the date the pledge is sold, the amount of the sale, and the name and address of the purchaser.
(b) Each licensee shall make available the book required in subsection (a) of this section and the articles purchased or pledged for inspection at all reasonable times by any city police officer.
(c) Each licensee shall complete and deliver to the city chief of police before the hour of 12:00 noon each Monday a correct copy on forms furnished by the police department from the book required in this section that describes all secondhand goods purchased or consigned during the preceding calendar week and provides all other information required to be recorded in the book by subsection (a) of this section. For purposes of this section, a calendar week ends at midnight Sunday.
(d) Each licensee shall maintain the records required by this chapter for at least two years.
(e) Any dealer in valuable articles, as defined by section 18-16-102(7), C.R.S., required to report to local law enforcement agencies by section 18-16-107, C.R.S., shall keep such records and make such reports to the city chief of police as required in this section.
4-17-8 Inspection of Goods Purchased, Consigned, or Pledged.
Any city police officer may examine any article purchased by or consigned or pledged to any licensee under this chapter and may demand that such article be exhibited to such officer.
4-17-9 Transactions With Certain Persons Prohibited.
No licensee shall purchase, accept under consignment, or accept as a pledge secondhand articles or tangible personal property from the following persons:
(a) Any person under eighteen year of age; or
(b) Any person who the licensee knows or has reason to believe has been convicted of burglary, robbery, felony theft, or theft by receiving; or
(c) Any person who appears to be under the influence of alcohol or any controlled substance, as defined in state law.36
4-17-10 Holding Period for Secondhand Goods.
No holder of a secondhand dealer license under this chapter shall alter, sell, or remove from the licensee's place of business any secondhand articles purchased or accepted under consignment until they have been in the licensee's possession at least ninety-six hours after filing the report required by subsection 4-17-7(c), B.R.C. 1981.
4-17-11 Information on Pawn Stub and Pawn Ticket.
At the time of receiving a pledge and upon the subsequent renewal of any loan, a pawnbroker licensed under this chapter shall deliver to the pledgor or the pledgor's agent a pawn ticket from a book containing stubs, which book, stubs, and tickets are correspondingly serially numbered. The stub shall contain the substance of the information required to be kept in the book prescribed by subsection 4-17-7(a), B.R.C. 1981.
4-17-12 Maximum Charges by Pawnbrokers; Commissions Void.
(a) No pawnbroker shall request or receive any greater rate of interest, commission, or compensation than the total rate of three percent per month computed upon the amount of money actually advanced. No pawnbroker may impose or collect any other charge upon the renewal of any loan or at any other time.
(b) All contracts for the payment of a commission by the borrowers for procuring a loan on personal property are void; a borrower who has paid such a commission may recover in an action at law twice the amount paid plus reasonable attorney fees.
4-17-13 Pledge Holding Period.
Each pawnbroker licensed under this chapter shall retain the pledge in the pawnbroker's possession on the licensed premises at least six months after the maturity of the loan.
4-17-14 Notice to Pledgor of Failure to Redeem and Sale.
(a) If the pledgor fails to redeem a pledge for six months after the maturity of the corresponding loan by repayment of the principal and all accrued interest charges, the pawnbroker may at any time thereafter mail a notice to the pledgor at the address noted on the pawn stub. The notice shall provide the number of the pawn ticket, a description of the property pledged, and notice that if the property is not redeemed within ten days from the date of the notice, it will be sold at auction.
(b) If the pledgor fails to redeem the pledge within ten days of the date of the notice prescribed in subsection (a) of this section, the pawnbroker may sell the pledge at public auction, no fewer than ten days after publishing a notice of sale in a newspaper of general circulation in the city providing the time and place of the auction, a description of the articles to be sold, and the name of the auctioneer to conduct the auction.
(c) If a sale held under this section produces money exceeding the amount of the loan, the interest due, and the expenses to advertise and conduct the sale, the pawnbroker shall pay such surplus to the person entitled to redeem the pledge. For purposes of this subsection, expenses of the sale, excluding advertising, that are credited against the proceeds of the sale may not exceed five percent of the amount obtained in the sale.
4-17-15 Hold orders by Police.
Any city police officer may order a pawnbroker to hold any article deposited with the pawnbroker for a reasonable period of time if the police officer has a reasonable belief that the article is stolen. A pawnbroker who receives such a hold order may not sell or dispose of the article or allow it to be redeemed as long as the hold order remains in effect. The pawnbroker may appeal to the city manager under the procedures prescribed by chapter 1-3, "Quasi-Judicial Hearings," B.R.C. 1981, to release any article subject to a hold order. The manager shall release the article if the pawnbroker shows good cause.
4-17-16 Revocation of License.
The city manager may suspend or revoke a license issued under this chapter for the grounds and under the procedures prescribed by section 4-1-10, "Revocation of Licenses," B.R.C. 1981.
34 Adopted by Ordinance No. 4637. Derived from Ordinance Nos. 1734, 1985, 2612, 4113.
35 Provident Loan Soc. v. City and County of Denver, 64 Colo. 400, 172 P. 10 (1918); Solomon v. City of Denver, 12 Colo. App. 179, 55 P. 199 (1898).
36 12-22-303(7), C.R.S.