Session of 1998
By Committee on Financial Institutions and Insurance
            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.
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

SB 537


  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-

SB 537


  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.