New York City Pawnbroker Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $10,000
- Who Needs it: All pawnbrokers operating in New York City, New York
- Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
- Who Regulates Pawnbrokers in New York City: The New York City Department of Consumer and Worker Protection
Background
New York State General Business Law 5-40 requires all pawnbrokers, also known as collateral loan brokers, operating in New York City to obtain a license from the Department of Consumer and Worker Protection (DCWP). The New York 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 $10,000 surety bond to be eligible for a license.
What is the Purpose of the New York City Pawnbroker Bond?
New York City requires pawnbrokers to purchase a surety bond as part of the application process to obtain a license. The bond protects the public from financial harm if the pawnbroker fails to comply with the regulations set forth in New York State General Business Law 5-41. Specifically, the bond protects the public if the pawnbroker engages in any acts of fraud or breaches any 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 York City Pawnbroker Surety Bond?
BondExchange makes obtaining a New York City 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 York City Pawnbroker Bond?
No, a credit check is not required for the New York City Pawnbroker bond. Because the bond is considered relatively low risk, the same low rate is offered to all pawnbrokers operating in the city, regardless of their credit history.
How Much Does the New York City Pawnbroker Bond Cost?
The New York City Pawnbroker bond costs just $100 per year or $10 per month.
Who is Required to Purchase the New York City Pawnbroker Bond?
New York City requires pawnbrokers to purchase a surety bond as a prerequisite to obtaining a license. To paraphrase New York State General Business Law 5-52, 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 York City?
Pawnbrokers in New York City must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the DWCP’s website or the application instructions for details on the process.
Pawnbrokers that plan to buy or sell used articles other than pledged or pawned items must also obtain a Secondhand Dealer General license.
License Period – All New York City Pawnbroker Licenses expire on April 30 of each year and must be renewed before the expiration date.
Step 1 – Complete the Basic License Application
Pawnbrokers must first complete a basic license application. Brokers will submit general business information on the form including a social security number, employer identification number, and applicant background information.
Step 2 – Purchase a Surety Bond
Pawnbrokers must purchase and maintain a $10,000 surety bond. The bond form must list the business name and address exactly as it appears on all other documents
Step 3 – Submit an Application
Pawnbrokers must submit their license application online or in person at the DCWP Licensing Center at the following address:
DCWP Licensing Center
42 Broadway, Lobby
New York, NY 10004
In-person applications are made by appointment only. Applicants who apply online must register an account with the City of New York’s online portal. Brokers must complete the application in its entirety and ensure they submit the following items:
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- $500 license fee
- Basic License Application
- Sales Tax ID Number
- Copy of $10,000 surety bond
- Copy of the bond receipt
- Copy of pawnbroker’s fingerprints
Pawnbrokers must schedule an appointment and pay a $75 fee to have their fingerprints taken. License fees are prorated, so applicants who submit between November 1st to December 31st or January 1st to April 30th should only pay a $250 license fee. The DWCP will notify the applicant within two weeks of receiving the application.
How Do New York City Pawnbrokers Renew Their Licenses?
Pawnbrokers will receive a renewal notice from the Department of Consumer and Worker Protection before their license expires. Brokers have the option to renew their license online here, in person, or by mail at the following address:
Licensing Center
42 Broadway, Lobby
New York, NY 10004
Pawnbrokers must pay a $500 renewal fee and renew their surety bond to avoid termination of their license. All New York City Pawnbroker Licenses expire on April 30 of each year and must be renewed before the expiration date.
What are the Insurance Requirements for Pawnbrokers in New York City?
New York City does not require pawnbrokers to purchase any additional insurance. Pawnbrokers must purchase and maintain a $10,000 surety bond.
How Do New York City Pawnbrokers File Their Bonds?
Pawnbrokers should mail their completed bond forms, including the power of attorney, to the Department of Consumer and Worker Protection at the following address:
42 Broadway, Lobby
New York, NY 10004
The bond requires signatures from both the surety company that issues the bond and the applicant. The surety company should include the following information on the bond form:
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- License type applied for
- Date the bond is signed
- Bond amount
- License term
What Can New York City Pawnbrokers do to Avoid Claims Made Against Their Bonds?
To avoid claims on their bonds, pawnbrokers in New York City must adhere to all licensing regulations and ensure that they:
- Do not engage in any acts of fraud
- Faithfully honor all consumer contracts
- 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 York City?
Most reputable pawnbrokers will purchase liability 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 York City Pawnbroker Customers?
New York City unfortunately does not provide a public database of active pawnbrokers in the city. We suggest contacting the Department of Consumer and Worker Protection to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
