Pawnbroker Bond

What is a Pawnbroker Bond?

Pawn brokers are considered a form of pseudo-financial institution and are therefore regulated. A pawnbroker bond is required by many states and municipalities.

Generally the surety bond amount is small and guarantees only that the pawn operator will operate withing the confines of the law, although some bond forms contain provisions that protect third parties from damages resulting from the pawnbroker's acts.

Duties of a pawnbroker secured by the surety bond include:

• Compliance with state code and administrative regulations.
• Receive property on pawn and securely warehouse the same.
• Maintain proper ownership records.
• File required reports with the pawnshop regulator.
• Return property promptly and in the condition in which it was received.
• Follow appropriate legal procedures when liquidating forfeited property.