A Historical Perspective of Florida Pawnbrokering

The United States has never had either nationally operated pawnshops or national regulation of pawnbrokers. It was not until the early 1880s that the first state legislation specifically regulating pawnbrokers was enacted.

Pawnbroking has a rather lengthy legislative history in Florida. The common thread running through the myriad of pawnshop regulations is nonimpedence of the conduct of pawnshop businesses. This is especially apparent when Florida Pawnbrokers are compared to other Florida lenders. Early Florida legislation focused on registration, crime prevention, and the raising of revenue. These statutes mandated state licensure (merely registration) and established procedures for documenting pawn transactions to assist law enforcement officials in tracing stolen property. This regulatory focus remains unchanged. Current statutory provisions still regulate pawnbrokers little beyond the extent necessary to assist law enforcement in recovering stolen property and in solving other theft-related crimes. Florida has never had legislation expressly limiting interest rates or other charges on pawn transactions. In contrast to many other states and the District of Columbia, Florida does not impose economically significant state licensing requirements on operating pawnshops.

To date, the Florida Legislature has allowed pawnshops to operate without intrusive and burdening restrictions and has thereby helped foster the economic growth of this important—yet still questioned and maligned—business. Recently, however, some federal and Florida court decisions, industry innovations and expansion, and local regulations have somewhat unsettled placid waters.

At the time Florida adopted the common law of England, the common law included regulations that required pawnbrokers both to record the identity of the goods pledged, the amount loaned, and the name and address of the pledgor and also to give the pledgor a copy of the record.

The first Florida statute specifically addressing pawnbrokers was chapter 5106, Laws of Florida, enacted in 1903. It appears to have been modeled after the common law. The statute required pawnbrokers to keep “a complete and true record of all their transactions” and to make these records available for inspection by law enforcement personnel. Each pawnbroker was required to pay a license tax of $100 to the state for each place of business. A penalty of one to six months’ imprisonment was imposed for violation of the law.

In 1913, the Legislature increased the license fee to $150 for those pawnbrokers in cities with populations of 10,000 or more. The record-keeping requirements for all pawnbrokers were amended to require data “showing from whom each article of their stock was purchased and the date of purchase, and the date and to whom each article was sold.”

In 1941, the 1913 provisions, with minor changes in the amount and structure of the licensure requirements, were recodified under the chapter regulating license taxes. In 1957, the Florida Legislature enacted legislation that expressly gave the pawnbroker the right to sell the pawn if no principal or interest were paid within six months of the pledge; the sale terminated all liability of the pawnbroker to the pledgor, and all rights and interests of both the pawnbroker and pledgor vested in the purchaser at sale. These provisions, which had to be printed on the pawn ticket, constituted notice of intent to sell and consent by the pledgor. No penalty was created for violation of this statute.

In 1959, the Legislature imposed on the pawnbroker an affirmative duty to make monthly reports to the local sheriff of all pawn transactions recorded pursuant to statute. In 1971, the statute was slightly modified to reflect a change in criminal penalties for violation of the licensure statute. Also, under a larceny statute, pawnbrokers were required to keep records of all merchan dise bought and sold and to make these records available to law enforcement personnel.

The state licensure provisions underwent major surgery in 1972 when most of the occupational licensing sections were repealed. State licensure of many businesses was abolished and local governments were granted the authority to issue occupational licenses. The language specifically regulating pawnbrokers was repealed, including the requirements to keep transaction records and to report these to local sheriffs. This revision, when coupled with the deletion of pawnbrokers from the larceny statute in 1975, meant that by the end of 1975, the only Florida statute governing pawnbrokers controlled the redemption period and sale of the pawn.  There were no licensing or record-keeping requirements, nor were there any penalties for violation of the remaining redemption/sale provisions.

In 1979, the void was partially filled with legislative reinstatement of the record-keeping requirements. The required records had to be available to police personnel upon request. The statute articulated that a lawful owner of stolen property, upon furnishing proof of ownership, was entitled to recover that property through police processes at no personal expense (that is, without either judicial process or reimbursement of the pawnbroker for the loan), unless the pawnbroker could produce evidence that the pledgor had provided proof of ownership of the pawn.

Currently, Florida pawnbroking is governed by chapter 538, as enacted in 1989. The main impetus behind the law was to confront the problem of property theft and drug-related crimes by facilitating recovery of stolen goods and apprehending those criminals who may turn to secondhand dealers for cash. Due to requests by the Florida Law Enforcement Recovery Unit, this comprehensive statute was enacted to group pawnbrokers and others under the category of “second-hand dealers” and to repeal all extant statutes relating to pawnbrokers, precious metals dealers, and junk dealers. By carefully examining the operative terms and their definitions, one could probably construct an interesting example of effective lobbying and legislative negotiation and compromise.

The statute applies to “transactions,” which means “any purchase, consignment, or pawn of secondhand goods by a secondhand dealer. “Secondhand dealer” is then defined as including all those “engaged in the business of purchasing, consigning, or pawning secondhand goods or entering into title loan transactions,” including “pawnbrokers, jewelers, precious metals dealers, garage sale operators, secondhand stores, and consignment shops.” This broad definition is subject to numerous exclusions. One of the exclusions, flea markets, was the subject of an unsuccessful constitutional challenge.

“Pawnbroker” is then defined as “any person, corporation, or other business organization or entity which is regularly engaged in the business of making pawns, but does not include a financial institution as defined [by statute] or any person who regularly loans money or any other thing of value on stocks, bonds, or other securities.” A “pawn” transaction can be either a “[l]oan of money . . . [with a] bailment of personal property as security” or a “[b]uy-sell agreement . . . whereby a purchaser agrees to hold property for a specified period of time to allow the seller the exclusive right to repurchase the property.” When the statute explicitly states that “[a] buy-sell agreement is not a loan of money,” the not-so-hidden intent is that a transaction so designed should not be subject to the usury statute.

The “new” statute, covering specified secondhand sales, secondhand dealers, and secondary metal recyclers, first became effective October 2, 1989, and has been amended in each legislative session since its creation. Although most of the subsequent amendments were minor clarifications, some notable additions to chapter 538 have been enacted. One amendment made explicit the requirement that a secondhand dealer maintain actual physical possession of all secondhand goods throughout a transaction; title or any other form of security in secondhand goods could not be accepted in lieu of actual physical possession. This blow to the title pawn (loan) industry was unsuccessfully challenged in the Florida Legislature in both 1993 and 1994. In 1995, title loans were explicitly authorized, but the legislation divorced the “new” title loan industry from that of the pawnshops.

Another statutory addition provided that if a secondhand dealer contests the identification or ownership claims of particular property in possession of the dealer, the person alleging ownership may bring an action for replevin in the county or circuit court. A universally common provision in pawnbroker regulation schemes (omitted from the original 1989 enactment but added in 1990) is the statutory provision that mandates the minimum length of time that a pawnbroker must keep a pawned article before selling it. The cutoff time distinguishes between a pawn that is “a loan of money” and a pawn that is “a buy-sell agreement.” If the pawn is a loan of money and the property has not been redeemed or there has been no payment on the account for a period of ninety days, the pawn is subject to sale or disposal. However, a pawn that is a buy-sell agreement is subject to sale or disposal in a shorter period of time, when the property has not been repurchased from the pawnbroker or there has been no payment on the account within sixty days.

The current chapter includes requirements for registration, record keeping, delivering copies of the records to law enforcement authorities, goods holding periods, and inspection by the authorities. The chapter also includes a listing of prohibited business practices; procedures for the return of stolen goods to the rightful owner and for restitution to the secondhand dealer by the convicted thief; penalties for violation of the Act; explicit permission for local governments to enact ordinances governing the operation of pawnshops; but no mandate regarding service charges, interest rates, or sale/purchase differential or similar charges. Yet, pawn transactions involving loans can still be subject to the maximum interest rates specified under Florida’s usury statute, as well as other statutes.

Various historical schemes illustrate the unique regulatory treatment afforded pawnbrokers. Still, pawnbrokers are heavily regulated, but many of these regulations are not strictly adhered to by the industry, in most instances because of a misunderstanding of the regulation or its applicability.

Visit Celbrity Pawn today, and see the example of a legitimate and licensed of a Pawn Shop in Broward County in action. No Pawn Shop in Boca, or jewelry store in Pompano Beach, of gun broker in Deerfield Beach can be more proud with super-efficient and compliant paperwork handling and customer service and Celebrity Pawn- the highest paying Pawnshop in Fort Lauderdale vicinity, and even more best Pawn Shop in South Florida.

With us you may pawn your car, pawn jewelry or pawn gun and get the highest offer than you would’ve got in any other pawnshop in Broward, Dade or Palm Beach County.