handout on the pawnshop regulation act.doc
TRANSCRIPT
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Handout on the Pawnshop Regulation Act (Presidential Decree No. 114)
What is the policy of PD 114? (Sec. 2)
Regulate establishment of pawnshops
Prevent and mitigate practices prejudicial topublic interest
Lay down requirements and standards
What is a pawnshop? (Sec. 3)
A pawnshop is a person or entity engaged inthe business of lending money on personalproperty delivered as security for loans.
A pawnshop may be established as a singleproprietorship, a partnership or a corporation.
How do you register a pawnshop? (Sec. 5-6)
1) If a single proprietorship, get certificateof registration from Department of Trade &Industry.
2) If a partnership or corporation, submitarticles of partnership or articles ofincorporation to the Securities and ExchangeCommission.
3) Get a business license from the city ormunicipality where pawnshop is located.
4)Submit information sheet and requirements toBangko Sentral ng Pilipinas.
5) BSP will issue an Acknowledgment ofRegistration (AOR). i
How much capital is required? (Sec. 7)
The minimum paid-in capital is P100,000.
The prudential capital ratio or the ratio of totalcapital to pledge loans is 50% provided totalpledge loans not exceed P 3 million.ii
If total pledge loans exceed P 3 million,additional capital of 30% of pledge loans inexcess of P 3 million is required.
What is the citizenship requirement? (Sec. 8)
In a single proprietorship, only Filipino citizen
In partnership, 70% of capital must be owned
by Filipinos
In a corporation, 70% of voting capital stock isowned by Filipinos or if non-stock corporation,70% of members are Filipinos
What is a pawn? (Sec. 3)
A pawn is personal property delivered by th
pawner to the pawnee as security for a loan
How do you pawn something?1)Deliver personal property to pawnshop.2)Pawnshop appraises the item.
3) Parties agree to the loan amount.4)Pawnshop gives pawn ticket and money.5)Pay debt with interest and redeem pawn.
How much can be loaned? (Sec. 9)
The amount of loan is agreed by the parties
Amount not less than 30% of appraised val
of security unless pawner manifests in writindesire to borrow lesser amount.
What are the charges? (Sec. 10)
Interest rates - no ceiling but not iniquitous,unconscionable, or contrary to morals iii
Service charges - P5.00 maximum
It is unlawful for a pawnshop to divide thepawn to collect greater interest and to requiadditional charge as insurance premium.
What is a pawn ticket? (Sec. 12)
A pawn ticket is the receipt for a pawn.
It states amount of loan, date of pawning, ra
of interest, name and residence of pawner.
How do you redeem a pawn? (Sec. 13)
Pay the debt with interest within 90 days frothe date of maturity of the loan.
How should pawnee notify pawner? (Sec. 1
On or before expiry of redemption period
Pawnshop shall notify pawner in writing
Notice shall state date, hour and place of sa
Mode is by text/SMS, email, fax, or mail iv
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What if a pawn is not redeemed? (Sec. 14)
If pawner fails to redeem, pawnbroker maysell or dispose of article received in pawn.
How is a pawn sold or disposed? (Sec. 15)
The disposition must be by public auction inhis place of business or other public place
After notice to pawner and publication of sale
What is the notice requirement? (Sec. 15)
Published notice in two daily newspapers
During week preceding the date of sale
Notice contains name of pawnshop, owner,address, hour and date of auction sale
In remote area, post notice in public places
How soon can a pawnshop close or transferits place of business? (Sec. 16)
No pawnbroker shall close or transfer hisplace of business within three months
Following maturity of any loan or pledge
Before any pawn is sold or disposed
May transfer place of business within city ormunicipality upon published notice
What is the BSP authorized to do? (Sec. 17)
Issue rules and regulations
Require from pawnshops reports
Exercise visitorial powers
Impose administrative sanctions
What are other duties of pawnshops?
Safeguard pawnshop assets
v
Exert ordinary diligence vi
Be Insured against firevii
What are the penalties? (Sec. 18)
Fine: P100 to P1,000
Imprisonment: 30 days to 1 year
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iSec. 4101P4, Manual of Regulation for Non-Bank Financial Institutions, P Regulations (Regulations Governing Pawnshops)
(MORP)ii
Sec. 4107P, MORPiii
Sec. 4303P, MORPiv Sec. 4324P, MORPv
Sec. 4141P, MORPvi
Sec. 4301P.1, MORPvii
Sec. 4171P, 4321P, MORP