Chapter 1301:8-5 Pawnbrokers

1301:8-5-01 Definitions.

(A) As used in Chapter 4727. of the Revised Code, "liquid assets" means assets that are expected to be realized in cash, sold, or consumed during the next business year including:

(1) Cash, including money in any form, such as cash on deposit, cash awaiting deposit, and cash funds available for use;

(2) Cash equivalents, such as short-term investments that are readily convertible to known amounts of cash, or are so near their maturities that they present insignificant risk of changes in value because of changes in interest rates;

(3) Receivables, including accounts receivable, notes receivable, and receivables from officers and employees;

(4) Inventories, including merchandise held for sale by a licensee or merchandise acquired by an applicant that is to be held for sale upon licensure;

(5) Prepaid expenses, including prepaid insurance, interest, rents, taxes, advertising, and operating supplies. Prepaid expenses, unlike other current assets, are not expected to be converted into cash.

(B) As used in division (B) of section 4727.08 of the Revised Code, "each pawn or purchase" includes all items brought in by a person to be pledged or purchased at the same time or on the same date unless the person requests in writing that certain items are to be pledged or purchased separately and acknowledges in writing that they understand additional fees may be incurred as a result of the separate pledges or purchases.

(C) As used in Chapter 4727. of the Revised Code and this chapter, "redeem" or "redemption" means payment in full of a pawn loan coupled with the return of the pledged property to the original pledgor or other person redeeming the pledge.

(D) As used in section 4727.11 of the Revised Code and in connection with redemptions by persons other than the original pledgors, "verify" means that the redeemer's name recorded by the licensee on the licensee's copy of the pawn statement is the same as the name displayed on picture identification shown to the licensee by the redeemer. Picture identification, as used in this rule, shall consist only of:

(1) A driver's license;

(2) Military identification; or

(3) Other government-issued identification.

(E) As used in this chapter, "pawn date" means the date the pledge was made.

(F) As used in this chapter, "superintendent" means the superintendent of financial institutions or the deputy superintendent for consumer finance as provided in section 1181.21 of the Revised Code.

Effective: 11/30/2017
Five Year Review (FYR) Dates: 8/14/2017 and 11/30/2022
Promulgated Under: 119.03
Statutory Authority: 4727.13(A)
Rule Amplifies: 4727.03, 4727.20, 4727.11, 4727.08, 4727.06
Prior Effective Dates: 12/1/79, 11/10/82, 12/30/88, 6/16/05, 1/15/10

1301:8-5-02 Advertising.

(A) The word "advertisements" as used in section 4727.16 of the Revised Code shall not include storefront signs, business cards, team jerseys, or any de minimis promotional materials, such as pens, pencils, balloons, or clothing. Advertisements include all printed, published, displayed, distributed, broadcast, or internet advertising or promotion. All advertisements shall clearly identify the licensee by the business name, licensed address, and license number appearing on the license issued under Chapter 4727. of the Revised Code. A business name suffix, such as "company," "Inc.," or "LLC," is not required to appear in advertisements provided the absence of the suffix does not cause confusion with the name of any other licensee.

(B) All internet advertising shall comply with paragraph (A) of this rule by either placing the licensee's business name, licensed address, and license number on every viewable web page of the website within the licensee's ownership and or control, or by placing the licensee's business name, licensed address, and license number on the licensee's home page and place a link to the home page on each additional web page. For purposes of this rule, a web page is one that may or may not scroll beyond the borders of the screen.

(C) A licensee maintaining information on an internet website shall make a good-faith effort to timely update the website when the information becomes outdated or expired. Each website maintained by a licensee shall disclose the date upon which the information contained therein was most recently updated. If a licensee's website is maintained on the licensee's behalf by a third party, the licensee shall provide to the third party a timely written notice, by mail, fax or electronic means, of any updates to outdated or expired information so that such updates may be accomplished in accordance with this rule. A licensee who provides such timely notice shall not be in violation of this paragraph if the third party fails to effect a requested change as notified.

(D) Every licensee shall maintain in each licensed location or in a central location, approved by the superintendent of financial institutions, a records file of all advertising, including newspaper, magazine, direct mailing, facsimile advertising and solicitations, roadside advertising, internet, and scripts of radio and television commercials, for a period of two years from the date last disseminated. A record or other file shall be readily available for inspection by the division of financial institutions at all times. Every licensee shall notify the division of financial institutions in writing of the location of the record or file. All licensees shall, upon the request of the superintendent, provide to the division of financial institutions any printed or electronic advertising done regarding any business conducted under Chapter 4727. of the Revised Code.

Replaces: 1301:8-5-02

Five Year Review (FYR) Dates: 08/11/2017 and 08/11/2022
Promulgated Under: 119.03
Statutory Authority: 4727.13(A)
Rule Amplifies: 4727.02, 4727.13 , 4727.16
Prior Effective Dates: 6/16/05, 11/15/10

1301:8-5-03 Notifications.

(A) The notification referenced in division (A) of section 4727.04 of the Revised Code concerning a pending move of a licensee's business location shall be delivered to the superintendent of financial institutions in writing.

(B) The notification referenced in division (C) of section 4727.04 of the Revised Code concerning changes to a licensee's posted hours of operation shall be delivered to the superintendent in writing at least five calendar days prior to the effective date of the changes.

(C) The notification referenced in division (H) of section 4727.03 of the Revised Code concerning the surrender or non-renewal of a licensee's license shall be delivered to the superintendent in writing. The notice shall state whether the licensee intends to dispose of active loans or reduce the rate of interest on such loans. If the licensee intends to dispose of the loans, the notice shall state the name and address of the licensee to whom the loans will be sold, transferred or assigned. The notice shall indicate whether the licensee intends to continue to operate another business from the current pawnbroker location and the nature of that business.

(D) If a licensee intends to dispose of an active loan, the licensee shall notify the pledgor or seller in writing of the name and address of the licensee to whom the loan will be sold, transferred, or assigned. This notice must be delivered to the pledgor or seller at least ten business days prior to the sale, transfer, or assignment of the loan. Licensees must be able to provide documentation satisfactory to the superintendent of financial institutions that this notice was provided to the pledgor or seller.

(E) For each place of business at which a licensee transacts pawnbroker business, a licensee shall notify the division, at the time of an original application or renewal application, of the name of the employee, as defined in paragraph (E) of rule 1301:8-5-08 of the Administrative Code, who is designated to comply with the continuing education requirements set forth in division (A) of section 4727.19 of the Revised Code. If the licensee determines that the designated employee is unable to meet those requirements, the licensee shall designate a new employee for that place of business and shall, within thirty days of the licensee's determination that the originally designated employee is unable to meet the continuing education requirements, notify the division of financial institutions in writing of the change. A designated employee shall be considered unable to meet the continuing education requirements for any of the following reasons:

(1) The employee is no longer employed by the licensee;

(2) The employee is prevented from complying with this rule due to active duty in the armed forces as defined in section 5903.01 of the Revised Code;

(3) The employee is prevented from complying due to serious illness or the serious illness of an immediate family member; or

(4) The superintendent approves the designation of a new employee for reasons not listed in this rule, under the following circumstances:

(1) The request is submitted in writing by the licensee within thirty days of the licensee's determination that circumstances warrant the designation of a new employee to meet the education requirements; and

(2) The request demonstrates good cause for the change in the designated employee.

(F) If the information contained in an application for a pawnbroker license becomes inaccurate for any material reason before or after the applicant becomes licensed, the applicant shall be responsible for correcting the inaccurate information in writing within fourteen days of the change unless otherwise required by Chapter 4727. of the Revised Code or this chapter.

(G) The written notifications prescribed by this rule may be delivered by postal mail, in person, via electronic mail, or via facsimile.

Effective: 11/30/2017
Five Year Review (FYR) Dates: 8/14/2017 and 11/30/2022
Promulgated Under: 119.03
Statutory Authority: 4727.13(A)
Rule Amplifies: 4727.02, 4727.19, 4727.11, 4727.04, 4727.03
Prior Effective Dates: 12/1/1979, 11/10/82, 12/30/88, 6/16/05, 11/15/10

1301:8-5-04 Obstruction of inspection; statement to pledgor; authorized fees.

(A) No licensee or any other person shall inhibit, obstruct, or refuse to permit an inspection, examination, or investigation conducted pursuant to Chapter 4727. of the Revised Code during each location's posted business hours.

(B) The forfeiture warning notice fee, the lost pawn statement fee, the storage fee, fees the licensee is required to pay in order to comply with the Brady Handgun Violence Protection Act of 1993, 107 Stat. 1536, 18 U.S.C. 922, shipping fees, interest, and principal reduction payments shall be recorded separately upon the licensee's copy of the pawn statement, form or computer software so as to be separately identifiable. Licensees must be able to provide documentation satisfactory to the superintendent of financial institutions supporting all third-party fees incurred by the licensee and passed on to the consumer.

(C) No licensee shall charge, demand, or receive fees other than those authorized by section 4727.06 of the Revised Code.

Effective: 11/30/2017
Five Year Review (FYR) Dates: 8/14/2017 and 11/30/2022
Promulgated Under: 119.03
Statutory Authority: 4727.13(A)
Rule Amplifies: 4727.05, 4727.07, 4727.06
Prior Effective Dates: 12/1/79, 11/10/82, 12/30/88, 4/1/90, 6/16/05, 11/15/10

1301:8-5-05 Unlicensed pawnbrokers.

If a person makes a pawn loan in violation of section 4727.02 of the Revised Code, the person has no right to collect, receive, or retain any interest or charges on the loan in violation of Chapter 4727. of the Revised Code, and the person has no right to possess the personal property pledged as security for the loan.

Five Year Review (FYR) Dates: 08/11/2017 and 08/11/2022
Promulgated Under: 119.03
Statutory Authority: 4727.13(A)
Rule Amplifies: 4727.02, 4727.13
Prior Effective Dates: 12/1/79, 11/10/82, 12/30/88, 6/16/05,

1301:8-5-06 Purchases; list of property held for sale.

(A) No owner, officer, member, partner, stockholder, agent, or employee of a licensee shall purchase personal property in circumvention of the record-keeping requirements of Chapter 4727. of the Revised Code.

(B) A licensee shall document the acquisition of all property held for sale on the licensed premises through a pawn ticket, purchase ticket, sales receipt, bill of sale, consignment agreement, or barter agreement. Consignment or barter agreements shall include the information listed in division (B) of section 4727.08 of the Revised Code.

(C) A licensee or employee shall require the pledgor to sign the completed pawn ticket, purchase ticket, sales receipt, bill of sale, consignment agreement, or barter agreement, and the signed forms shall be retained in accordance with section 4727.08 of the Revised Code.

(D) A licensee or employee shall document and keep a record of the name of the person redeeming the pawn, and the date and time that the pawn was redeemed. Such records shall be retained in accordance with section 4727.08 of the Revised Code.

Effective: 11/30/2017
Five Year Review (FYR) Dates: 8/14/2017 and 11/30/2022
Promulgated Under: 119.03
Statutory Authority: 4727.13(A)
Rule Amplifies: 4727.08
Prior Effective Dates: 6/16/05, 11/15/10

1301:8-5-07 Payments on a pawn loan.

(A) A licensee shall not accept an interest or storage payment for any month other than the current month, except when the pledgor redeems the pledged property. Prepayment of interest and storage charges may not occur at the time the loan is originated. The pawnbroker may, however, assess a full month's interest and storage charge for any fraction of a month that exists at the time the loan is redeemed.

(B) A pawn loan shall not be refinanced. A licensee shall not redeem a pawn loan on behalf of a pledgor. A licensee shall not require or accept a pro-rata payment on any interest or any other charges.

(C) A licensee shall not establish a new pawn date for a pawn loan when any payment on the loan is made but no redemption occurs.

(D) If a pawn account is not paid in full, or the interest and storage charges due on a pawn account are not paid, on or before the thirtieth day from the date the forfeiture warning notice was mailed pursuant to division (A) of section 4727.11 of the Revised Code, the pledged property shall be forfeited to the licensee on the day after that thirtieth day. For purposes of calculating thirty days, the day of the mailing shall not be counted. If the thirtieth day falls on a day that the licensee is not open for business, the thirtieth day shall be deemed to be the first subsequent full day that the licensee is open for business.

Effective: 11/30/2017
Five Year Review (FYR) Dates: 8/14/2017 and 11/30/2022
Promulgated Under: 119.03
Statutory Authority: 4727.13(A)
Rule Amplifies: 4727.06, 4727.06, 4727.11
Prior Effective Dates: 11/10/82, 12/30/88, 6/16/05, 11/15/10

1301:8-5-08 Continuing education.

(A) Application for course approvals.

(1) Any person seeking to offer live classroom or online continuing education courses to licensees and designated employees shall request approval from the superintendent . In order for a course to be considered for approval the following information and documentation shall be submitted to the superintendent in writing at least fifteen days prior to the initial date of the proposed course.

(a) The name, address and telephone number of the person proposing to offer the course, and the names and duties of all persons affiliated in an official capacity with the course;

(b) The names and addresses of the owners of the entity or association if the applicant is an entity or association;

(c) The policy regarding attendance and procedure for record keeping of attendance;

(d) A summary of the course, including:

(i) A description of the type of training (e.g. seminar, conference, course, other);

(ii) The time, date, and location of the course. If the course will be offered more than once, the time, date, and location for each course shall be provided;

(iii) The proposed initial date of the continuing education course;

(iv) Any prerequisite for admission to or participation in the course;

(v) The duration of the course;

(vi) The form of attendance certificate;

(vii) Methods of record maintenance;

(viii) Textbooks and student materials prescribed;

(ix) An outline or syllabus;

(x) Attendance or participation fees;

(xi) A sample of any intended advertising;

(xii) The number of credit hours offered to course participants. Each course shall be a minimum of one credit hour.A credit hour must provide for no less than fifty minutes of instruction. One credit hour consists of fifty minutes of a sixty-minute hour. Breaks, introductions, lunches, announcements, and other non-instruction time are to be excluded in calculating the credit hours requested.

(xiii) The title of the continuing education course.

(e) The names and qualifications of the course instructors; and

(f) Any other information required by the superintendent to determine whether the proposed continuing education course will maintain or increase a licensee's or designated employee's skill, knowledge, or competency in the pawnbroker business.

(2) Whenever there is a material change in an approved continuing education course, the course provider shall promptly notify the superintendent of the change in writing. The course provider shall notify the superintendent in writing, at least ten days in advance of the addition of an offering date for an approved course, or change in an offering date for an approved course, and notify the superintendent in writing at least three days in advance of all course changes including locations, times, instructors, or changes in course content.

(3) Each course provider shall submit to the division of financial institutions, within fifteen days after completion of each continuing education course, a list of licensees or employees who successfully completed the course. The list shall include:

(a) Course title;

(b) Date conducted;

(c) Address location where the course was conducted;

(d) Names of licensees or employees who successfully completed the course; and

(e) Pawnbroker license numbers of the licensees.

(B) Course approval criteria.

(1) The superintendent, when considering approval of a continuing education course, shall apply the following criteria:

(a) Courses will not be approved in segments of less than one credit hour. No continuing education course shall be approved in which classroom or online instruction exceeds eight credit hours in any one day;

(b) Course instructors must meet at least one of the following qualifications:

(i) Possession of a bachelor's degree in a field related to that in which the person is to teach, from a school listed as an institution of higher learning by the United States department of education, or from a comparable school of a foreign country;

(ii) Possession of a valid teaching credential or certificate from this state or another state authorizing the holder to teach in the field of instruction in which the person is to teach;

(iii) Five years full-time experience in a profession, trade, or technical occupation in the applicable field; or

(iv) Any combination of at least five years of full-time experience relevant to the applicable field and college level education.

(c) The following entities may offer continuing education following approval of the superintendent:

(i) Colleges or universities;

(ii) Community or junior colleges;

(iii) Pawnbrokers or pawnbroker-related organizations;

(iv) Proprietary schools;

(v) Individuals;

(vi) Other providers approved by the division; or

(vii) State or federal agencies or commissions.

(d) Passage of an examination by a licensed pawnbroker or designated employee shall not be a requirement for successful completion of a continuing education course.

(e) The superintendent shall approve courses for continuing education which maintain and increase the skill, knowledge and competency of state licensed pawnbrokers and their designated employees and which fall within the following areas:

(i) Retail and safety and security;

(ii) Appraisal of precious stones and precious metals;

(iii) Copyright and trademark laws;

(iv) Use of the internet as it relates to the pawnbroker business;

(v) Compliance with federal laws applicable to the pawnbroker business such as firearms, bankruptcy, search and seizure, and lending laws;

(vi) Compliance with state laws applicable to the pawnbroker business such as second hand dealers law, search and seizure, and the pawnbroker act;

(vii) Computer software application and training relating to the pawnbroker business;

(viii) Courses that address issues related to human trafficking; and

(ix) Any other training which the superintendent deems to be relevant to the efficient and lawful operation of a pawnbroker business.

(f) The following courses will not be considered by the superintendent to meet the continuing education requirements for licensed pawnbrokers and their designated employees:

(i) Courses in mechanical and business skills such as typing, speed reading, memory improvement or language;

(ii) Sales promotion or other meetings held in conjunction with the general business of the attendee or his business associates;

(iii) Meetings which are a normal part of in-house staff training;

(iv) That portion of any course devoted to breakfast, lunch, and dinner or other refreshment; or

(v) Courses consisting entirely of videotaped information.

(vi) A concealed carry course shall not be counted toward the continuing education requirements under section 4727.19 of the Revised Code more than once every other licensing cycle.

(g) The superintendent shall approve an online course for continuing education credit based upon a satisfactory review of the following criteria:

(i) The application materials shall be submitted in writing pursuant to this rule and must demonstrate the following:

(a) The course is designed to ensure that students actively participate in the instructional process while completing the course by utilizing techniques that require substantial student interaction with the computer program;

(b) If in each unit of instruction there is no activity from the student after fifty minutes of instruction time, the course will shut down and the student will have to begin from the beginning of the unit;

(c) The provider utilizes procedures that provide reasonable assurance of student identity and that the student receiving the continuing education credit for completing the course actually performed all of the work required to complete the course; and

(d) The provider utilizes a clock or timer on each screen to control navigation through the course to ensure that course completion time equals the amount of continuing education credit hours received.

(2) Paragraph (B) of this rule does not limit the superintendent's authority to disapprove any application that fails to meet the standards of this rule.

(3) If the superintendent approves an online course pursuant to paragraph (B)(1)(g) of this rule, the superintendent shall designate the number of credit hours to be assigned to the course.

(C) Alternative methods of course approval by the superintendent:

(1) The superintendent may, upon the request of a person licensed under Chapter 4727. of the Revised Code, approve any course that meets the criteria set forth in paragraph (B) of this rule. Licensees seeking approval of a course under this paragraph shall submit the request for approval in writing, and shall provide sufficient information about the course to demonstrate that the course meets the requirements of paragraph (B) of this rule.

(a) If requesting approval prior to a designated employee taking a course, all information must be submitted to the superintendent in writing at least fifteen days in advance of the course.

(b) If requesting approval after a designated employee has taken a course, all information must be submitted to the superintendent in writing prior to the licensee's renewal date, and must include proof of attendance in the course and documentation of successful completion by the designated employee to the satisfaction of the superintendent.

(2) The superintendent may, sua sponte, approve any course after making a determination that the course meets the criteria set forth in paragraph (B) of this rule.

(3) The superintendent shall retain the right to refuse to approve any course that fails to meet the criteria set forth in paragraph (B) of this rule, or if insufficient information is provided to support approval of the course.

(4) If the superintendent approves a course pursuant to this paragraph, the superintendent shall designate the number number of credit hours to be assigned to the course.

(5) This paragraph shall not apply to the approval of online courses.

(D) Continuing education credit may be granted for participation, other than as a student, in continuing education courses approved by the superintendent or in other processes or programs approved by the superintendent which relate to pawnbroker practices or techniques. Participants receiving such credit may include, but are not limited to:

(1) Instructors of approved continuing education courses may receive continuing education for the number of unduplicated subject matter hours taught for each different course;

(2) An individual who has authored pawnbroker articles or textbooks may receive continuing education credit for the published article or textbook upon the submission of the following:

(a) A copy of the published article or textbook;

(b) A summary of the article or textbook, with date of publication;

(c) The number of copies sold or circulation of the publication carrying the article; and

(d) An explanation of how the material published meets the criteria set forth in paragraph (B) of this rule.

(E) For purposes of determining compliance with division (A) of section 4727.16 of the Revised Code, the term "employee" shall mean any individual, including a licensee, who has direct contact with customers, whether on a full time-part time, or seasonal basis, such as an individual or licensee that sells or purchases merchandise, or makes a loan on behalf of a pawnbroker.

(F) In the event that the licensee, pursuant to paragraph (E) of rule 1301:8-5-03 of the Administrative Code, designates a new employee for purposes of completing the continuing education requirements referenced in division (A) of section 4727.19 of the Revised Code, the newly designated employee must complete any remaining continuing education credit hours for that place of business within the required period.

(G) For the licensing cycle ending June 30, 2018, a licensee shall be considered to have met the continuing education requirements set forth in section 4727.19 of the Revised Code if the licensee has met the requirements of that section as in effect July 1, 2016, or as in effect June 30, 2018. For each licensing cycle thereafter, a licensee is required to comply with the requirements set forth in section 4727.19 of the Revised Code as in effect June 30, 2018.

Effective: 11/30/2017
Five Year Review (FYR) Dates: 8/14/2017 and 11/30/2022
Promulgated Under: 119.03
Statutory Authority: 4727.13(A), 4727.19(E)
Rule Amplifies: 4727.19
Prior Effective Dates: 6/16/05, 11/15/10

1301:8-5-09 [Rescinded] Continuing education.

Effective: 11/15/2010
R.C. 119.032 review dates: 07/19/2010
Promulgated Under: 119.03
Statutory Authority: 4727.13, 4727.19
Rule Amplifies: 4727.19
Prior Effective Dates: 6/16/2005

1301:8-5-10 Working knowledge of pawnbroking procedures. [Rescinded].

Rescinded eff 6-16-05