pawnshop report

8/18/2019 Pawnshop Report

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Alma Jane C. AgliamCredit Transactions

Pres. Decree No. 114

PAWNSHOP REGULATION ACT

SECTION 1. Short Title.

This decree may be cited as the “ Pawnshop Regulation Act.

SECTION 2. Declaration of Policy. --- It is hereby declared the policy of the Stateto:

Regulate the establishment of pawnshops; Place their operation on a sound and stable basis; Prevent and mitigate practices prejudicial to public interest; and To lay down the minimum requirements and standards for establishment and

operation

SECTION 3. Definitions.

Pawnshop – person or entity engaged in the business of lending money onpersonal property delivered as security for loans

- Pawnbroker; pawn-brokerage Pawner – borrower from a pawnshop Pawn – personal property delivered by the pawner to the pawnee as security

for loan

Pawn ticket – pawnbroker’s receipt for a pawn Property – only such personal property as may actually be delivered to the

control and possession of pawnshop

SECTION 4. Form of organization. --- A pawnshop may be established as a:

Single Proprietorship; Partnership; or Corporation


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SECTION 5. Registration and licensing. --- Any person or entity desiring to engagein pawnshop business shall:

a) Register with the: Bureau of Commerce (now, Bureau of Trade Regulation and ConsumerProtection) ---> for Single Proprietorship

Securities and Exchange Commission ---> Partnership or Corporationb) Secure a license from city or municipality having territorial jurisdiction over

the place of establishment and operation

SECTION 6. Requirement of registration with the Central Bank.

Shall file an information sheet under oath with the Central Bank beforecommencement of actual operations

Those operating before the approval of this Decree shall register with theCentral Bank within six months

SECTION 7. Capital

P 100,000.00

SECTION 8. Citizenship requirement.

Single Proprietorship – only Filipino citizens Partnership – at least 70% of its capital shall be owned by Filipino citizens Corporation – at least 70% of the voting capital stock shall be owned by

Filipino citizens; in lieu of capital stock, 70% of the members entitled to voteshall be Filipino citizens

SECTION 9. Amount of loan.

Upon agreement between the parties In no case be less than than 30% of the appraised value of the pawn

*** Unless the pawner manifests in writing the desire to borrow alesser amount


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SECTION 10. Rates of interest.

Only the rate allowed by the Usury Law In addition to interest charges, pawnshops may impose a maximum service

charge of P5.00, but in no case to exceed 1% of the principal loan

SECTION 11. Maintenance of records. --- Every pawn broker shall keep amemorandum book in which shall be entered, in ink, at the time of each loan orpledge, an accurate account and description, in Filipino or English:

The amount of money loaned The date of pawning The rate of interest

Name and residence of pawner Particular description of pawner including nationality, sex, general

appearance

SECTION 12. Pawn ticket.

To be delivered to the pawner at the time of loan or pledge Shall contain the substance of the record in Sec. 11 excluding the description

of pawner

SECTION 13. Redemption. --- The pawner who fails to pay his obligation on the dateit falls due may, within 90 days from the date of maturity of the obligation, redeemthe pawn by payment of the principal of the debt with interest.

SECTION 14. Disposition of pawn on default of pawner. --- Failure to redeem inaccordance with the preceding section,

The pawn broker may sell or dispose the pawn upon pawner’s notification ofsuch sale on or before the 90-day period, stating the date, hour and place ofsale.

SECTION 15. Public auction of pawned articles. --- No pawn broker shall sell orotherwise dispose of any pawned article except at:

His place of business within the territorial limits of the municipality or city

where his pawnshop is located; Under the control and direction of a duly licensed auctioneer


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After one publication in at least two newspapers printed in the city ormunicipality during the week preceding the sale

In remote areas, newspaper publication shall be substituted by postingnotices in conspicuous places within the territorial limits

Published or posted notices shall be in English AND either Pilipino orlocal dialect

Shall contain the name of pawnshop, owner, address of establishment,hour and the date of the auction sale.

SECTION 16. Closing and removal of business period. --- No pawn broker shall closeor transfer his place of business:

within three months after the expiration of the period for which any article orthing shall have been taken or received by him in pawn; or

before any such article shall have been sold or disposed of in accordance withthis Decree

Provided, however, that removal or transfer of pawn broker’s place ofbusiness from one place to another within the territorial limits may beauthorized on condition of:

Publication of notice of such removal in two local daily papers, one inEnglish and one in Pilipino or local dialect, for a period of not less than

three days before removal (stating the date of removal, the address tobe vacated and transferred)

And post notices in conspicuous places within both premises during theperiod of publication

SECTION 17. Grant of authority to the Central Bank. --- The Central Bank is herebyauthorized:

To issue rules and regulations to implement the provisions contained herein; To require from pawnshops reports of condition and such other reportsnecessary to determine compliance with this Decree;

To exercise visitorial powers whenever deemed necessary; and To impose such administrative sanctions including the imposition of fines for

violations


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SECTION 18. Penalties.

A fine of not less than one hundred pesos P100.00 and not more than onethousand pesos P1,000.00; or

Imprisonment for not less than 30 days and not more than one year; or Both

SECTION 19. Matters not covered by this Decree. --- The provisions of existing laws,insofar as they are not in conflict with any provision of this Decree, shall apply inmatters not otherwise specifically provided for in this Decree.

SECTION 20. Separability clause. --- If any provision or section of this Decree, or theapplication thereof to any person or circumstances, is held invalid, the otherprovisions or sections of this Decree, and the application of such provisions orsections to other persons or circumstances, shall not be affected thereby.

SECTION 21. Effectivity. --- This Decree shall take effect immediately.

ISSUED: January 29, 1973.

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