Oregon Pawnbroker Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $25,000
- Who Needs it: All pawnbrokers operating in Oregon
- Purpose: To protect the public from financial harm if the pawnbroker violates the terms of their license
- Who Regulates Pawnbrokers in Oregon: The Oregon Department of Consumer and Business Services
Background
Oregon Revised Statute 726.040 requires all pawnbrokers operating in the state to obtain a license from the Department of Consumer and Business Services. The Oregon 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 $25,000 surety bond to be eligible for a license.
What is the Purpose of the Oregon Pawnbroker Bond?
Oregon 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 Oregon Revised Statute 726.070. Specifically, the bond protects the public if the pawnbroker engages in 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 an Oregon Pawnbroker Surety Bond?
BondExchange makes obtaining an Oregon 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 Oregon Pawnbroker Bond?
No, a credit check is not required for the Oregon 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 Oregon Pawnbroker Bond Cost?
The Oregon Pawnbroker bond costs just $100 per year or $10 per month.
Who is Required to Purchase the Oregon Pawnbroker Bond?
Oregon requires pawnbrokers to purchase a surety bond as a prerequisite to obtaining a pawnbroker license. To paraphrase Oregon Revised Statute 726.010, 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.
In lieu of a surety bond, pawnbrokers may obtain an irrevocable letter of credit in the amount of $25,000. Surety bonds are generally considered the better option for businesses, as they free up working capital that would otherwise be restricted. For more information on the differences between a bond and a letter of credit, check out our Surety Bonds vs. Letters of Credit article here.
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 Oregon?
Pawnbrokers in Oregon must navigate several steps to obtain a license and must obtain a separate license for each pawn shop location they operate. Below are the general guidelines, but applicants should refer to the application instructions for details on the process.
License Period – All Oregon Pawnbroker Licenses expire on December 31 of each year and must be renewed before the expiration date.
Step 1 – Purchase a Surety Bond
Pawnbrokers must purchase and maintain a $25,000 surety bond.
Step 2 – Complete the Application
Pawnbrokers should submit a completed application to the Department of Consumer and Business Services at the following address:
P.O. Box 14480
Salem, OR 97309-0405
Pawnbrokers must complete the application in its entirety and ensure they submit the following items:
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- $500 application fee
- Surety bond or irrevocable letter of credit
- A current financial statement showing assets, liabilities, and net worth
- A resume citing experience and business qualifications
- Proof of business registration with the Oregon Secretary of State
- Criminal background check form
- Proof of liability insurance for pledged items
- A feasibility study for the business location
- Sample pawn ticket
All applicants will be subject to a background check. Once the application is approved, pawnbrokers must pay a $350 license fee to obtain their license. Contact the Department of Consumer and Business Services for additional assistance in the application process.
How Do Oregon Pawnbrokers Renew Their Licenses?
The Department of Consumer and Business Services will send out renewal instructions to pawnbrokers before their license expires. To renew their license, pawnbrokers must complete an application online here through the department’s online portal. Pawnbrokers must complete the application in its entirety and submit the following items:
- Renewal notice letter
- Copy of current pawn ticket
- Declaration pages of insurance policy
- Pawnbroker Annual Report Figures
Pawnbrokers must also pay a $350 renewal fee and ensure that they renew their surety bond to avoid termination of their license. Renewal applications must be submitted by December 15th to avoid any late penalties. All Oregon Pawnbroker Licenses expire on December 31 of each year and must be renewed before the expiration date.
What are the Insurance Requirements for Pawnbrokers in Oregon?
Oregon Revised Statute 726.380 requires pawnbrokers to purchase and maintain sufficient insurance coverage against possible loss or damages of pawned items resulting from fire, theft, and burglary (limits not specified). Pawnbrokers must also purchase and maintain a $25,000 surety bond.
How Do Oregon Pawnbrokers File Their Bonds?
Pawnbrokers should submit their completed bond forms, including the power of attorney, to the Department of Consumer and Business Services at the following address:
P.O. Box 14480
Salem, OR 97309-0405
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 and address of the entity/individual(s) buying the bond
- Surety company’s name, address, and state of incorporation
- Pawn shop business location
- Date the bond is signed
What Can Oregon Pawnbrokers do to Avoid Claims Made Against Their Bonds?
To avoid claims on their bonds, pawnbrokers in Oregon 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 Oregon?
Oregon requires pawnbrokers to purchase and maintain sufficient insurance coverage against possible fire, theft, and burglary. 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 Oregon Pawnbroker Customers?
Oregon unfortunately does not provide a public database of active pawnbrokers in the state. We suggest contacting the Department of Consumer and Business Services to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.