Mississippi Pawnbroker Bond: A Comprehensive Guide
At a Glance:
- Average Cost: Between $100 to $500 per year
- Bond Amount: $10,000
- Who Needs it: All pawnbrokers operating in Mississippi
- Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
- Who Regulates Pawnbrokers in Mississippi: The Mississippi Consumer Finance Division
Mississippi Code 75-67-321 requires all pawnbrokers operating in the state to obtain a license with the Consumer Finance Division before conducting business. The Mississippi 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 or submit a $10,000 certificate of deposit to be eligible for licensure.
What is the Purpose of the Mississippi Pawnbroker Bond?
Mississippi requires pawnbrokers to purchase a surety bond or submit a certificate of deposit 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 Mississippi Code 75-67-323. 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 Mississippi Pawnbroker Surety Bond?
BondExchange makes obtaining a Mississippi 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 Mississippi Pawnbroker Bond?
Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Mississippi 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 Mississippi Pawnbroker Bond Cost?
The Mississippi Pawnbroker bond can cost anywhere between $100 to $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 $10,000 bond requirement.
$10,000 Pawnbroker Bond Cost
|Bond Cost (1 year)
|Bond Cost (1 month)
|600 – 624
|575 – 599
|500 – 574
*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 Mississippi Pawnbroker Bond?
Mississippi 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 operate. To paraphrase Mississippi Code 75-67-303, 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
Exemptions to this definition include:
- Federal or state governments
- Banks, credit unions, and loan associations
In lieu of a surety bond, applicants for a pawnbroker license may choose to submit a $10,000 certificate of deposit.
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 Mississippi?
Pawnbrokers in Mississippi must navigate several steps to secure a pawnbroker license through the Nationwide Multistate Licensing System & Registry (NMLS). Below are the general guidelines, but applicants should refer to the application checklist or visit the Consumer Finance Division’s website for details on the process.
License Period – All Mississippi Pawnbroker Licenses expire on December 31st of each year and must be renewed before the expiration date.
Step 1 – Meet the Requirements
To qualify for a license, pawnbrokers operating in Mississippi must meet the following criteria:
- Have not been convicted of a felony within the last 10 years
- Have completed at least six hours of continuing education with the Mississippi Pawnbrokers Association
Step 2 – Purchase a Surety Bond
Pawnbrokers must purchase and maintain a $10,000 surety bond, or submit a $10,000 certificate of deposit.
Step 3 – Submit an Application
All Mississippi Pawnbroker License applications should be submitted online through the NMLS online here. Pawnbrokers must complete the application in its entirety and submit the following items:
- Surety bond or certificate of deposit
- Company formation documents
- Nationwide criminal background check
- Continuing education certificate
Pawnbrokers must pay a $500 initial license fee and a $36.25 criminal background check fee online through the NMLS.
How do Mississippi Pawnbrokers Renew Their License?
To renew their license, pawnbrokers should submit a renewal application and pay a $350 renewal fee via the NMLS online here. Brokers must complete six hours of continuing education prior to being issued a new license. All Mississippi Pawnbroker Licenses expire on December 31st of each year and must be renewed before the expiration date.
What are the Insurance Requirements for Mississippi Pawnbrokers?
Mississippi does not require pawnbrokers to purchase any form of liability insurance. Pawnbrokers must purchase and maintain a $10,000 surety bond.
How Do Mississippi Pawnbrokers File Their Bonds?
Pawnbrokers should submit their completed bond forms, including the power of attorney, to the Nationwide Mortgage Licensing System (NMLS) online here.
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 of the entity/individual(s) buying the bond
- Surety company’s name, city, and state of incorporation
- Pawnshop business address, city, and county
- License term period
- Date the bond is signed
- Notary acknowledgments for principal and surety
What Can Mississippi Pawnbrokers Do to Avoid Claims Against Their Bonds?
To avoid claims against their bonds, pawnbrokers in Mississippi 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 Mississippi?
Mississippi does not require pawnbrokers to purchase liability insurance as a prerequisite to obtaining a pawnbroker license. However, most reputable businesses will purchase this insurance anyway. 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 Mississippi Pawnbroker Customers?
Mississippi 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.