Duluth Pawnbroker Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $2,000
- Who Needs it: All pawnbrokers operating in Duluth, Minnesota
- Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
- Who Regulates Pawnbrokers in Duluth: The Duluth City Clerk’s Office
Background
Duluth Legislative Code 36-2 requires all pawnbrokers operating in the city to obtain a license from the Duluth City Clerk’s Office. The Duluth 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 $2,000 surety bond to be eligible for licensure.
What is the Purpose of the Duluth Pawnbroker Bond?
Duluth requires pawnbrokers to purchase a surety bond as part of the application process to obtain a pawnbroker license. The bond protects the public from financial harm if the pawnbroker fails to comply with the regulations set forth in Duluth Legislative Code 36-5. Specifically, the bond protects the public if the pawnbroker 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 Duluth Pawnbroker Surety Bond?
BondExchange makes obtaining a Duluth 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 Duluth Pawnbroker Bond?
No, a credit check is not required for the Duluth 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 Duluth Pawnbroker Bond Cost?
The Duluth Pawnbroker bond costs just $100 per year or $10 per month.
Who is Required to Purchase the Bond?
Duluth requires pawnbrokers to purchase a surety bond as a prerequisite to obtaining a pawnbroker license. Pawnbrokers must obtain a separate license for each pawn shop location they plan to open. To paraphrase Duluth Legislative Code 36-1, a pawnbroker is a person who issues loans 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.
Duluth Legislative Code 36-1 dictates that licensed pawnbrokers have the authority to receive or purchase precious metals or items containing precious metals and are not required to obtain a separate precious metal dealer license.
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 Duluth?
Pawnbrokers in Duluth must navigate several steps to obtain a license. Below are the general guidelines, but applicants should contact the City Clerk’s Office for details on the process.
License Period – All Duluth Pawnbroker Licenses expire on April 30th of each year and must be renewed before the expiration date.
Step 1 – Purchase a Surety Bond
Pawnbrokers must purchase and maintain a $2,000 surety bond.
Step 2 – Complete the Application
Pawnbrokers are required to submit their application to the City Clerk’s Office by mail at the following address:
City Hall, Room 318
411 West First Street
Duluth, MN 55802
Applicants must complete the form in its entirety and submit the following items:
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- $440 license fee
- $36 one-time investigation fee
- Workers’ compensation policy
- Tax identification form
- Surety bond
Applicants that apply for a license after May 1st will be charged a prorated license fee for the remainder of the year, with a minimum fee amount of $32.
How do Duluth Pawnbrokers Renew Their License?
Pawnbrokers should contact the City Clerk’s Office to obtain a renewal application before their license expires. All Duluth Pawnbroker Licenses expire on April 30 of each year and must be renewed before the expiration date.
What are the Insurance Requirements for Duluth Pawnbrokers?
Minnesota Statute 176.182 requires all pawnbrokers with employees to obtain workers’ compensation insurance coverage as a prerequisite to obtaining a business license (limits not specified). Pawnbrokers must also purchase and maintain a $2,000 surety bond.
How Do Duluth Pawnbrokers File Their Bonds?
Pawnbrokers should mail or deliver their completed bond forms, including the power of attorney, to the City Clerk’s Office at the following address:
City Hall, Room 318
411 West First Street
Duluth, MN 55802
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
- Date the bond is signed
- License term period
- Notary acknowledgments
What Can Duluth Pawnbrokers do to Avoid Claims Against Their Bonds?
To avoid claims against their bonds, pawnbrokers in Duluth must 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 Duluth?
Duluth requires all pawnbrokers with employees to obtain workers’ compensation insurance coverage as a prerequisite to obtaining a business license. 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 Duluth Pawnbroker Customers?
Duluth unfortunately does not provide a public database of active pawnbrokers in the city. We suggest contacting the City Clerk’s Office to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.