STATE OF LOUISIANA

OFFICE OF FINANCIAL INSTITUTIONS

BATON ROUGE, LOUISIANA

LOUISIANA PAWNSHOP ACT

QUESTIONS AND ANSWERS

 

1.         Who must be licensed?

All pawnbrokers which means any person who lends money on a deposit or pledge or who takes other things into possession as security for money advanced or who makes a public display at his place of business of the sign generally used by pawnbrokers to denote his business, namely, three gilt or yellow balls, or who publicly exhibits a sign that money is to be loaned on things on deposit. 

2.         How long does it take to get licensed?

If all information and documentation is submitted correctly at the initial receipt of the application then normal licensure time is approximately 3 to 4 weeks.  It is imperative for all applicants to be as thorough and timely in the submission of their application for licensure in order for the Office to efficiently expedite the licensing time.  Please remember that you, the applicant, control much of the licensure time frame by your thoroughness and correctness in filing the initial application. 

3.         What is the fee for licensing?

$1,000; $700 for the licensing fee and $300 for the application fee.

4.         What qualifications must be met to be eligible for a license?

To be eligible for a license whether by issuance of a new license or a transfer of an existing license, an applicant shall meet all of the following:

(1)        Be over eighteen years of age and of good character and reputation.

(2)        Not have been convicted of a felony under the laws of the United States, the state of Louisiana, or any other state or country within the last ten years.

(3)        Show that the pawnshop shall meet all other requirements of law.

(4)        Have net assets of at least $50,000 or obtain and file with the commissioner a surety bond issued by a company licensed to do business in Louisiana in the amount of at $50,000. 

5.         What if a pawnbroker operates more than one pawnshop?

Each location at which a pawnbroker regularly conducts business must have a separate license.  An application and payment of a $500 fee for each additional location must be submitted.

6.         6.        Does the net assets/surety bond requirement apply for each location that I operate?

 No.  The $50,000 net assets requirement applies to the entity that is being licensed; therefore, if you own one pawnshop, you must meet and  maintain the $50,000 requirement.  If you own four pawnshops, the net asset/bond requirement remains the same.  However, if multiple pawnshops have common ownership but are different juridical entities, the requirement is $50,000 per entity.

7.         7.    What are net assets? 

Net assets mean the book value of current assets less applicable liabilities.  Net assets may include capital investment unencumbered by a lien or other encumbrance and subject to a claim by a general creditor.

8.         8.    What type of financial statement must I submit?

A current balance sheet and income statement should be submitted.  If the information furnished can not be verified, an audited statement conducted by a licensed CPA can be required.  The audit must be conducted in compliance with Generally Accepted Accounting Principles.

9.         9.    When is my renewal due?  What is the renewal fee?

Your renewal is due no later than September 1st of each successive year.  The fee is $300 per location.

10.      10.     Is there a penalty for late renewal?

$150 if the renewal packet is postmarked after September 1st but prior to October 1st.

  11.    11.       If I wish to transfer my license to another entity, what is required?

An application for a new license is required upon a 25% or more change in the ownership of any licensed pawnshop. 

In the event that a licensee wishes to change its legal entity it shall notify the Commissioner 30 days prior to such change and submit a fee of $100.  A natural person can become a juridical person and a juridical person can transfer into another juridical person provided that 75% or more of the ownership in the newly created entity remains the same as that legal entity currently licensed by the Commissioner.

12.       12.    What is a juridical person?

Any juridical person is an entity to which the law attributes personality, such as a corporation or a partnership.  The personality of a juridical person is distinct from that of its members.

13.       What if I cease doing business as a pawnshop?

Before a licensee ceases business, he shall provide 30 days prior written notice to the Commissioner, who will then cancel the license.  The licensee must also provide 30 days prior written notice to all persons who have things in pledge.  The pawnshop license must be returned, signs must be removed, and the address of the location where records will be maintained for two years must be submitted to our Office.

14.       14.    What are the designated hours for a pawnshop? 

A pawnbroker shall neither open his place of business before 7 a.m. nor keep it open after 9 p.m., except during the month of December during which the hour of 9 p.m. will be extended to 10 p.m.

No pawnbroker may keep his pawnshop open on Sunday except during the period beginning on the fourth Thursday of November and ending on January 1st.

15.       15.    Are there any restrictions governing the location of a pawnshop?

Your designated place of business may not be within 300 feet or less of any official gaming establishment or designated docking facility of a river boat licensed to conduct gaming activities or gaming operations pursuant to Chapter 4 or 5 of Title 27 of the Louisiana Revised Statutes of 1950.

16.       16.    Are there any restrictions governing motor vehicle "title only" pawns?

Under no circumstances shall the practice commonly referred to as motor vehicle "title only" pawn transactions be allowed in Louisiana.  Every motor vehicle subject to a pawn transaction shall be stored at the business location at which the transaction occurred or at any other location in this state secured or maintained by the pawnbroker.

17.      17.     What is the penalty if I do not obtain a license?

Any person who engages in the business of operating a pawnshop or who advertises in any media or by any means that he is a pawnbroker without first securing the license shall be punished by a fine up to five thousand dollars by the commissioner or imprisoned for not more than one year, or both.

18.       18.    Who are the people with whom Iíll be interacting?

Commissioner of Financial Institutions, John Ducrest, is responsible for all facets of the agency.  Chief Examiner, Ann Lemenager, oversees all operations in the Non-Depository Institutions Division.  Review Examiner, Susan Jandle, handles examination questions.  Administrative Specialist, Sandra Ledoux, is in charge of the administrative review of your application.  Of course, all OFI employees are willing to assist you in any way possible.  If you have any questions, please call Sandra Ledoux at (225) 922-0638.


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Last updated 08/08/06