New Jersey Pawnbroker Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $1,000
- Who Needs it: All pawnbrokers operating in New Jersey
- Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
- Who Regulates Pawnbroker in New Jersey: The New Jersey Department of Banking and Insurance
Background
New Jersey Revised Statute 45:22-2 requires all pawnbrokers operating in the state to obtain a license with the Department of Banking and Insurance before conducting business. The New Jersey legislature enacted the licensing requirement to ensure that pawnbrokers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, pawnbrokers must purchase and maintain a $1,000 surety bond to be eligible for licensure.
What is the Purpose of the New Jersey Pawnbroker Bond?
New Jersey requires pawnbrokers to purchase a surety bond as part of the application process to obtain a pawnbroker license. The bond ensures that the public will be protected from financial harm if the broker fails to comply with the regulations set forth in New Jersey Revised Statute 45:22-7. Specifically, the bond protects the public in the event the broker engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the pawnbroker violates the terms of their license.
How Can an Insurance Agent Obtain a New Jersey Pawnbroker Surety Bond?
BondExchange makes obtaining a New Jersey Pawnbroker bond easy. Simply log in to your account and use our keyword search to find the “Pawnbroker” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the New Jersey Pawnbroker Bond?
No, a credit check is not required for the New Jersey Pawnbroker bond. Because the bond is considered relatively low risk, the same low rate is offered to all pawnbrokers operating in the state, regardless of their credit history.
How Much Does the New Jersey Pawnbroker Bond Cost?
The New Jersey Pawnbroker bond costs just $100 per year or $10 per month.
Who is Required to Purchase the Bond?
New Jersey requires pawnbrokers to purchase a surety bond as a prerequisite to obtaining a pawnbroker license. Pawnbrokers must obtain a separate license and purchase a separate surety bond for each pawn shop location they plan to operate.
To paraphrase New Jersey Revised Statute 45:22-1, a pawnbroker is a person who issues loans at interest to individuals that leave their property, as collateral, for the broker to sell on condition that the customer may repurchase the property within a fixed period of time.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How do Pawnbrokers Apply for a License in New Jersey?
Pawnbrokers in New Jersey must navigate several steps to secure a pawnbroker license. Below are the general guidelines, but applicants should refer to the application instructions or visit the Department of Banking and Insurance’s website for details on the process.
License Period – All New Jersey Pawnbroker Licenses expire on June 30 of every odd-numbered year (2025, 2027, etc.).
Step 1 – Purchase a Surety Bond
Pawnbrokers must purchase and maintain a $1,000 surety bond.
Step 2 – Submit an Application
All New Jersey Pawnbroker License applications should be submitted by mail to the following address:
Licensing Services Bureau
NJ Dept. of Banking and Insurance
P.O. Box 473
Trenton, NJ 08625
Pawnbrokers must complete the application in its entirety and submit the following items:
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- Surety bond
- Audited financial statement prepared by a CPA
- Copy of liability and fire insurance coverage
- A copy of the broker’s fingerprints
- Personal Certification Form
- 2” x 2” Passport type photograph
- Company formation documents
- Arrest and Conviction Form, if applicable
Pawnbrokers must pay a $500 initial license fee by company check or money order, and all applicants are subject to a background check. Once submitted, applications typically take 30 days to process. Contact the Department of Banking and Insurance for additional support in the application process.
How do New Jersey Pawnbrokers Renew Their License?
Pawnbrokers will receive a renewal notice by April 1 by either email or mail with instructions on how to renew their license. All New Jersey Pawnbroker Licenses expire on June 30 of every odd-numbered year (2025, 2027, etc.).
What are the Insurance Requirements for the New Jersey Pawnbrokers?
New Jersey requires pawnbrokers to obtain liability and fire insurance coverage to cover any pledged item in the event of loss by fire, theft, or other damage. Pawnbrokers must also purchase and maintain a $1,000 surety bond.
How Do New Jersey Pawnbrokers File Their Bonds?
Pawnbrokers should submit their completed bond forms, including the power of attorney, to the Department of Banking and Insurance when submitting their application at the following address:
Licensing Services Bureau
NJ Dept. of Banking and Insurance
P.O. Box 473
Trenton, NJ 08625
The surety bond requires signatures from both the surety company, including witness signatures, that issues the bond and from the broker. The surety company should include the following information on the bond form:
- Legal name, city, and county of the entity/individual(s) buying the bond
- Surety company’s name, city, county, and state of incorporation
- Pawnshop business address, city, and county
- Date the bond goes into effect and expires
What Can New Jersey Pawnbrokers do to Avoid Claims Against Their Bonds?
To avoid claims against their bonds, pawnbrokers in New Jersey must ensure that they:
- Do not engage in any acts of fraud or misrepresentation
- Do not breach contracts made with consumers
- Maintain all required transaction records
- Return all pledged goods that have been paid for
- Obtain proof of identification during each transaction
What Other Insurance Products Can Agents Offer Pawnbrokers in New Jersey?
New Jersey requires pawnbrokers to obtain liability and fire insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for New Jersey Pawnbroker Customers?
New Jersey conveniently provides a public database of licensed pawnbrokers operating in the state. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
