Among the many businesses in Ohio that require a license, most people would not consider pawnbrokers. However, as a business owner, you know how carefully the state government regulates your industry. The driving force behind strict licensing requirements for any profession is the protection of the public. It is no different for pawnbrokers.
Licensing for pawnbrokers goes through the Department of Commerce. Within that agency, the Consumer Finance Section oversees the licensing and compliance of people like you. By requiring pawnbrokers to adhere to their licensing guidelines, the DOC protects the public from fraud and bad faith, ensuring, for example, that the pawnbroker isn't selling stolen merchandise. Recently, the licensing requirements for pawnbrokers in Ohio got even tougher.
Changes in the rules
To begin with, the very definition of a pawnbroker is now broader. If you purchase property from an individual with the intention of selling it, or if the purchase includes an agreement that the seller can repurchase the item for a higher price, you are a pawnbroker. This may mean that, even if you don't own a shop specifically for pawning, you may need a license if you carry out such transactions. Some additional changes in the laws governing pawnbrokers include the following:
- If you own more than one location for operating a pawnshop, you will need a separate license for each location.
- Instead of the previously required $100,000 in liquid assets when you apply for a license, the law now requires you to have assets worth $125,000. While your license is valid, you will now need $75,000 worth of assets instead of $50,000.
- The new law demands you carry a surety bond of $50,000, which is double the previous bond requirement.
Surety bonds are like insurance for the consumer. By carrying a bond, you prove to your customers that you are willing to follow the regulations set forth in your license. If one of your customers suffers harm because you fail to abide by the laws, you may face penalties up to the amount of your bond.
Meeting the challenge
While it may seem like a burden to you to meet the higher standards set by the Department of Commerce, the agency claims its purpose is two-fold: to increase protections for the general public and to improve the reputation of the pawnbroker industry by raising the standards. You may agree that these are noble causes, but the changes in the licensing requirements likely raise many questions concerning your personal situation.
Fortunately, you can seek advice and assistance from an attorney who is familiar with the recent changes in licensing laws and who can respond to your questions. You will also find an advocate in such an attorney when your license is due for renewal or when you face challenges regarding your licensing privileges.