SB 292-PAWNBROKERS  2:51:56 PM CHAIR FRENCH announced the consideration of SB 292. JOSH TEMPEL, Staff, to Senator Huggins, sponsor, said SB 292 would create a statewide standard for regulating pawnbrokers. Basically, it will codify what good pawnshops are already doing thereby providing Alaska consumers and businesses with further protection. This effort started four years ago and has generated a lot of interest. MR. TEMPEL explained that pawnshops loan money on items that a person brings in and leaves as collateral. The person redeems their collateral item by paying off the loan plus a little interest. The bill establishes that pawnbrokers would be licensed under the Department of Commerce, Community and Economic Development and it places a few restricts on pawnbroker transactions. For example, a pawnbroker may not enter a pawnbroker transaction with a person who is 1) under age 18; 2) under the influence of alcohol or a controlled substance; 3) without proper identification; and 4) pawning stolen property. Furthermore, pawnbrokers would be required to maintain a written or electronic log of each transaction for a period of one year after the transaction is complete. The pawnbroker must give the pledgor a receipt for the item and a copy of the transaction agreement. SB 292 places restrictions on the interest and fees that a pawnbroker may charge and requires pawnbrokers to safely store any items used as collateral. It also offers guidelines for people who aren't able to repay their loan in the appropriate amount of time including a 30-day grace period. If a service member pawns an item and then deploys, the interest on the item is frozen until the service member returns. At that time the original agreement becomes active. MR. TEMPEL said the bill requires that employees of pawnshops are of good character and it offers guidelines to both police and property owners when they find stolen property in a pawnshop. Pawnbrokers are required to conduct a weekly inventory and report to local law enforcement agencies. Pawnbrokers may be disciplined if they don't adhere to these requirements. MR. TEMPEL reiterated that good pawnbrokers already do these things. The bill has support and it's good for consumers and businesses in Alaska. 2:56:47 PM SENATOR WIELECHOWSKI observed that page 1, line 14, removes current language about a person lending money on secondhand articles. MR. TEMPEL explained that the bill aims to exclusively regulate pawnbrokers so pawnbrokers will no longer be associated with regulations for secondhand stores and used bookstores. SENATOR WIELECHOWSKI questioned the impact of this proposed change. MR. TEMPEL replied the bill has no impact on individuals who deal in secondhand articles; it relates specifically to pawnbrokers He offered to provide information on the separate regulations governing secondhand stores. 2:58:16 PM SENATOR WIELECHOWSKI said he'd appreciate that information. He then asked the impact of removing the phrase "and the electronic record" from page 2, lines 14-15. MR. TEMPEL replied it cleans up the language; both the electronic record and the book in which entries are made are addressed later in the statute. SENATOR WIELECHOWSKI asked if there would still be a requirement to record entries electronically. MR. TEMPEL replied that's correct; the bill adds sections to separately regulate pawnbrokers, starting with the new Sec. 08.76.100. CHAIR FRENCH said he'd like to take public testimony today and Mr. Tempel would be asked to return to give an in-depth analysis of the provisions at a future hearing. 3:00:06 PM FERNANDO PENNIA, Government Affairs Director, Cash America, said he is pleased to speak in support of SB 292. This bill will provide a regulatory framework for the operation of pawnshops in Alaska, five of which are operated by Cash America in Anchorage. Alaska is the only state that does not have comprehensive, statewide regulation of pawnshops. The bill addresses this deficit and will provide protection for consumers and businesses. SB 292 is proactive and seeks to protect pawnshop owners and their customers who are currently vulnerable to unforeseen circumstances that could affect the industry. CHAIR FRENCH closed public testimony and held SB 292 in committee.