Baltimore Pawnbroker Bond: A Comprehensive Guide
February 6, 2023
This guide provides information for insurance agents to help their customers obtain a Baltimore Pawnbroker bond.
At a Glance:
- Average Cost: Between $250 to $2,500 per year
- Bond Amount: $50,000
- Who Needs it: All pawnbrokers operating in Baltimore, Maryland
- Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
- Who Regulates Pawnbrokers in Baltimore: The Baltimore Department of Finance
Baltimore City Code 11-3 requires all pawnbrokers operating in the city to obtain a license with the Department of Finance before conducting business. The Baltimore City Council 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 $50,000 surety bond to be eligible for licensure.
Additionally, Baltimore City Code 11-2 dictates that there may not be more than 45 pawnbrokers holding a city license at any given time.
What is the Purpose of the Baltimore Pawnbroker Bond?
Baltimore 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 Baltimore City Code 11-4. 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 Baltimore Pawnbroker Surety Bond?
BondExchange makes obtaining a Baltimore Pawnbroker surety bond easy. Simply login to your account and use our keyword search to find the “Pawnbroker” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (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 Baltimore Pawnbroker Bond?
Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Baltimore Pawnbroker bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.
How Much Does the Baltimore Pawnbroker Bond Cost?
The Baltimore Pawnbroker bond can cost anywhere between $250 to $2,500 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $50,000 bond requirement.
$50,000 Pawnbroker Bond Cost
|Credit Score||Bond Cost (1 year)|
|600 – 624||$625|
|550 – 599||$1,250|
|525 – 549||$1,500|
|500 – 524||$2,500|
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
Who is Required to Purchase the Bond?
Baltimore requires pawnbrokers to purchase a surety bond as a prerequisite to obtaining a pawnbroker license. To paraphrase Baltimore City Code 11-1, 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.
How Do Pawnbrokers Apply for a License in Baltimore?
Pawnbrokers in Baltimore must navigate several steps to secure a pawnbroker license. Below are the general guidelines, but applicants should refer to the application instructions for details on the process.
License Period – All Baltimore Pawnbroker Licenses expire one year from the date of issuance and must be renewed before the expiration date.
Step 1 – Register with the Department of Assessment and Taxation
First-time applicants for a pawnbroker license must ensure that they are registered and in good standing with the State of Maryland Department of Assessment and Taxation Office. All pawnbrokers are required to provide an SDAT # when submitting their license application.
Step 2 – Purchase a Surety Bond
Pawnbrokers in Baltimore must purchase and maintain a $50,000 surety bond.
Step 3 – Complete an Application
All Baltimore Pawnbroker License applications should be submitted to the Department of Finance at the following address:
200 Holiday St.
Baltimore, Maryland 21202
Applicants must complete the form in its entirety and submit the following items:
- Maryland SDAT ID Number
- Surety Bond Verification-Validation Form
- Copy of Trader’s License
Pawnbrokers must pay a $2,000 license fee by check payable to the City of Baltimore. Contact the Department of Finance for assistance in the application process.
How do Baltimore Pawnbrokers Renew Their Licenses?
To renew their license, pawnbrokers should submit a renewal application to the Department of Finance at the following address:
200 Holiday St.
Baltimore, Maryland 21202
Pawnbrokers must pay a $2,000 licensing fee by check to renew their license and a separate application must be submitted for each location. All Baltimore Pawnbroker Licenses expire one year from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for Baltimore Pawnbrokers?
Baltimore does not require pawnbrokers to purchase any form of liability insurance. Pawnbrokers must purchase and maintain a $50,000 surety bond.
How Do Baltimore Pawnbrokers File Their Bonds?
Pawnbrokers should file their completed bond forms, including the power of attorney, with the Baltimore City Comptroller at the following address:
Baltimore City Hall
100 Holliday St.
Baltimore, MD 21202
The surety bond requires signatures, including witness signatures, from both the surety company that issues the bond and from the broker. The surety company should include the following information on the bond form:
- Legal name and business address of the entity/individual(s) buying the bond
- Surety company’s name
- Bond amount
- Date the bond is signed and expires
What Can Baltimore Pawnbrokers do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, pawnbrokers in Baltimore must ensure that they:
- Do not engage in any acts of fraud
- Do not breach the agreed upon terms of any sale
- Do not pawn any stolen or illegally obtained items
What Other Insurance Products Can Agents Offer Pawnbrokers in Baltimore?
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 Baltimore Pawnbroker Customers?
Baltimore unfortunately does not provide a public database of active pawnbrokers in the city. We suggest contacting the Department of Finance for a list of licensed pawnbrokers. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.