Chapter 1301:8-5 Pawnbrokers

As used in Chapter 4727. of the Revised Code, “liquid assets” means current assets that are expected to be realized in cash, sold, or consumed during the next business year. Current assets consist of the following:

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

(B) 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;

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

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

(E) Prepaid expenses, including prepaid insurance, interest, rents, taxes, advertising, and operating supplies. Prepaid expenses, unlike other current assets, are not expected

Effective: 06/16/2005

R.C. 119.032 review dates: 11/15/2009

Promulgated Under: 119.03

Statutory Authority: 4727.13

Rule Amplifies: 4727.03

(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 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) A person not licensed under Chapter 4727. of the Revised Code shall not advertise in telephone directories or any other medium under any category labeled “pawn,” “pawnbroker,” or words of similar import, even if such advertisements include statements or disclaimers indicating that the person does not engage in the business of a pawnbroker. Failure to comply with this paragraph shall be considered a violation of division (B) of section 4727.16 of the Revised Code.

(C) A licensee shall maintain a file of all newspaper, magazine, direct mailing, internet, roadside advertising, and scripts of radio and television commercials for a period of one year from the date the advertisement is published or disseminated.

Effective: 06/16/2005

R.C. 119.032 review dates: 11/15/2009

Promulgated Under: 119.03

Statutory Authority: 4727.13

Rule Amplifies: 4727.02, 4727.13, 4727.16

(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 at least thirty days prior to commencing business as a pawnbroker at the new location.

(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 two business days prior to the effective date of the changes.

(C) The notification referenced in division (G) 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 no later than one month and no sooner than three months prior to the date on which the licensee intends to cease conducting business as a pawnbroker. The notice required by this paragraph 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.

(D) Each location of a licensee shall notify the superintendent in writing within ten business days of the newly designated individual or salesperson who is to meet the continuing education requirements referenced in divisions (A) to(C) of section 4727.19 of the Revised Code in the event the originally designated individual or salesperson is unable, for any reason, to comply with the continuing education requirements.

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

Effective: 06/16/2005

R.C. 119.032 review dates: 11/15/2009

Promulgated Under: 119.03

Statutory Authority: 4727.13

Rule Amplifies: 4727.03, 4727.04, 4727.13?, 4727.19

(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.

(B) 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.

(C) The forfeiture warning notice fee, the lost pawn statement fee, the storage fee, the “Brady” fee, 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.

Effective: 06/16/2005

R.C. 119.032 review dates: 11/15/2009

Promulgated Under: 119.03

Statutory Authority: 4727.13

Rule Amplifies: 4727.05, 4727.11

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.

Effective: 06/16/2005

R.C. 119.032 review dates: 11/15/2009

Promulgated Under: 119.03

Statutory Authority: 4727.13

Rule Amplifies: 4727.02

All provisions and restrictions of Chapter 4727. of the Revised Code concerning a pawn loan transaction, including but not limited to the interest and charges limitations of section 4727.06 of the Revised Code, the pawn form requirements of section 4727.08 of the Revised Code, the forfeiture notice of section 4727.11 of the Revised Code, and the 72-hour retention period of section 4727.12 of the Revised Code, apply to the purchase/repurchase transaction described in division (A) of section 4727.01 of the Revised Code.

Effective: 06/16/2005

R.C. 119.032 review dates: 11/15/2009

Promulgated Under: 119.03

Statutory Authority: 4727.13

Rule Amplifies: Chapter 4727

(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. All documentation shall be kept at the licensed location at all times and shall be available for inspection by the superintendent of financial institutions and by the chief of police of the municipal corporation or township in which the licensee’s place of business is located, or, if the place of business is not located within a municipal corporation or a township that has a chief of police, by the sheriff of the county in which the place of business is located. Upon demand of any of them, the licensee shall produce and show the documentation.

Effective: 06/16/2005

R.C. 119.032 review dates: 11/15/2009

Promulgated Under: 119.03

Statutory Authority: 4727.13

Rule Amplifies: 4727.08

(A) As used in section 4727.06 of the Revised Code and this rule:

(1) “Month” means the monthly pawn cycle. The monthly period ends on the same numerical day in the concluding month as the day of the month from which the computation is begun, unless there are not that many days in the concluding month, in which case the period ends on the last day of that month.

(2) “Fraction of a month” does not include the first day of the monthly pawn cycle.

(B) If the principal balance of a pawn loan is reduced, the interest computation for the month in which the principal reduction occurs shall be based upon the principal amount existing at the close of business on the first day of the month in which the principal balance is reduced.

(C) A licensee shall not accept interest and storage payments for the month in which the payment is made nor for any subsequent months. 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.

(D) Money received from a pledgor making a payment pursuant to section 4727.06 of the Revised Code shall be applied first to any legally collectible unpaid interest, storage charges, and mailing notice charges earned by the licensee, and then to the principal.

(E) 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.

(F) 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. As used in Chapter 4727. of the Revised Code and this chapter, “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.

(G) 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. However, 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: 06/16/2005

R.C. 119.032 review dates: 11/15/2009

Promulgated Under: 119.03

Statutory Authority: 4727.13

Rule Amplifies: 4727.06

(A) Application for course approvals.

(1) Any person seeking to offer continuing education courses to licensees and designated salespersons shall apply to the superintendent of financial institutions for approval of the courses on forms prescribed by the superintendent. The application forms and a specified nonrefundable processing fee must be submitted to the superintendent at least thirty days prior to the initial date of the proposed course. The application form shall include the following information:

(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) The maximum number of participants per session;

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

(iii) 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;

(iv) The proposed initial date of offering;

(v) Any prerequisite for admission or participation;

(vi) The duration of the course;

(vii) The form of attendance certificate;

(viii) Methods of record maintenance;

(ix) Textbooks and student materials prescribed;

(x) An outline or syllabus;

(xi) Attendance or participation fees;

(xii) A sample of any intended advertising;

(xiii) The number of credit hours. 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 of other non-instruction time is to be excluded in calculating the credit hours requested. Each course shall be a minimum of one credit hour. Food may not be served or consumed during instruction time.

(xiv) The title of the course offering.

(e) The names and qualifications of teachers and instructors; and

(f) Any other information required by the superintendent to determine whether the proposed offering will maintain or increase a licensee’s or designated salesperson’s skill, knowledge, or competency in the pawnbroker business.

(2) Whenever there is a material change in an approved offering, the person shall promptly notify the superintendent in writing. An offering person or entity 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 offering person or entity shall submit to the division of financial institutions, within fifteen days after completion of each offering, a list of licensees and individuals who successfully completed the course. The list shall include:

(a) Course title and certification number;

(b) Date conducted;

(c) Address location where the course was conducted;

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

(e) Pawnbroker license numbers of the licensees;

(f) Addresses (home or business) of licensees.

(B) Course approval criteria.

(1) The superintendent, when acting on an application for approval of a continuing education course, shall apply the following criteria:

(a) Courses will not be approved in segments of less than one-half credit hour. No offering will be approved in which classroom instruction exceeds six credit hours in any one day;

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

(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) Communities or junior colleges;

(iii) Pawnbrokers or pawnbroker-related organizations;

(iv) State or federal agencies or commissions;

(v) Proprietary schools;

(vi) Individuals; or

(vii) Other providers approved by the division.

(d) Each continuing education course shall be open to all state-licensed pawnbrokers and their designated salespersons.

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

(f) The superintendent shall approve courses for continuing education which maintain and increase the skill, knowledge and competency of state licensed pawnbrokers and their designated salespersons 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; and

(viii) Any other training which the superintendent deems to be relevant to the efficient and lawful operation of a pawnshop.

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

(i) Courses designed to prepare applicants for the demonstration of a working knowledge of pawnbroker practices required by section 4727.03 of the Revised Code;

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

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

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

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

(vi) Courses consisting entirely of videotaped information.

(2) Paragraph (B)(1)(g) of this rule does not limit the superintendent’s authority to disapprove any application that fails to meet the standards of this rule.

(C) Equivalent/alternative activities criteria.

(1) 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:

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

(b) 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:

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

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

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

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

(D) Pawnbroker attendees.

(1) If a corporation is licensed as a pawnbroker, the twelve hours of continuing education instruction required by section 4727.19 of the Revised Code shall be completed by the manager or the successor of the manager named in the license application submitted pursuant to section 4727.04 of the Revised Code.

(2) If a partnership is licensed as a pawnbroker, the twelve hours of continuing education instruction shall be completed by one of the partners.

(3) If a limited liability company is licensed as a pawnbroker, the twelve hours of continuing education instruction shall be completed by one of the members.

(4) If a sole proprietor is licensed as a pawnbroker, the twelve hours of continuing education instruction shall be completed by the sole proprietor.

(E) Individuals, designated salespersons, employees.

(1) The individual who completes the twelve hours of continuing education required in division (A) of section 4727.19 of the Revised Code will be considered to have satisfied the licensee’s requirement under that division for all of the licensee’s related branch pawnshops.

(2) The phrase “more than three employees” as used in division (B) of section 4727.19 of the Revised Code shall not include the individual who completed the twelve hours of continuing education required by division (A) of section 4727.19 of the Revised Code when calculating the number of employees. In a location where the individual who completed the twelve hours of continuing education is regularly present to conduct business, “more than three employees” means that a salesperson shall be designated to satisfy division (B) of section 4727.19 of the Revised Code when a fourth employee is present.

(3) If a licensee has branch pawnshops, a salesperson shall be designated to satisfy division (C) of section 4727.19 of the Revised Code when there are three or more employees present in any branch pawnshop location.

(4) In the event that the originally designated individual or salesperson is unable to comply with the continuing education requirements and has not fulfilled the continuing education requirements referenced in divisions (A) to (C) of section 4727.19 of the Revised Code, the newly designated individual or salesperson must complete any remaining required continuing education credit hours of the original designated individual or salesperson within the required period.

(5) As used in Chapter 4727. of the Revised Code and this chapter, “employee” is one who has a direct contact with the customers, whether on a full-time, part-time, or seasonal basis, such as an individual that sells or purchases merchandise or makes a loan on behalf of the pawnshop. The following individuals will not be considered by the superintendent to meet the definition of an “employee,” provided that the individual at no time sells or purchases merchandise or makes a loan on behalf of the pawnshop:

(a) Janitors:

(b) Bookkeeping personnel; or

(c) Warehouse personnel.

Effective: 06/16/2005

R.C. 119.032 review dates: 11/15/2009

Promulgated Under: 119.03

Statutory Authority: 4727.13

Rule Amplifies: 4727.19

Rescinded eff 6-16-05