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Texas AG Paxton approves College Station's reduced hold time on items bought by pawnshops

Attorneys & Judges

By Solange DeLisle | Mar 19, 2020

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BRYAN — Texas Attorney General Ken Paxton has issued an opinion as to whether the state's Pawnshop Act preempts municipal regulation of dealers. 

The question was posed by the Brazos County Attorney Rodney Anderson. Anderson had asked if the Texas Pawnshop Act prevented an ordinance adopted by the City of College Station which required people, including pawnbrokers, who purchase particular used personal property to resell to electronically report information about the items to law enforcement and keep the property for a set amount of time before selling it.  Anderson explained in the question that the ordinance applies only when a pawnbroker buys used goods in a transaction that would not require a pawnshop license. 

In Paxton's letter to Anderson, he said he understands the reason to ask if the city can oversee pawnbrokers when they buy used personal property in the same fashion as other second-hand dealers. 

Paxton wrote the ordinance has two key elements. It requires second-hand dealers who buy certain used personal property to record specific information about the sale and put it into an only database or electronic inventory tracking system which is maintained by law enforcement. However, the Legislature's reason behind the Pawnshop Act was to keep a system in the transfer of personal property by and through pawnshops to prevent stolen property transactions. The second component of the ordinance is that it generally requires pawnshops who buy used personal property to hold it for up to five days after the transaction. The Act also authorizes the Commissioner to pick a reasonable period where the pawnbroker may not sell or dispose of an item. Administrative regulations put into effect by the Finance Commission established that pawnshops must hold such items for a period of at least 20 days or less than that same time frame if a local jurisdiction enacts an ordinance. 

In Paxton's opinion, he wrote that a municipality doesn't have the power to create it's own procedures for pawnshops to record transactions and cooperate with law enforcement. But, he said a city does have the ability to lower the amount of time pawnbrokers have to hold onto an item. 

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