Surety Bonds

[WFAInc]

Are surety bonds neccessary for consignment sales? We are trying to renew our second hand dealer license and the Chief of Police is asking for a $20,000 and $100,000 surety bond persuant to section 21303 (a)(b) and 21304 (a)(b) of the Secondhand Dealer and Pawnbroker Laws Handbook.

We've been doing business for years without these bonds and now that we have a new Chief of Police, he is asking for these before issueing our license.

Does anyone have any imput on the neccesity of these bonds? I figure we don't need them since we are not a pawnbroker.

I'm going to try to scan and attach the sections here.


TO CHIEF OF.doc

[billslugg]

Assuming that I read the attachment correctly and that it is, in fact, the law of California then:

Point out to the chief that you are not asking for a pawnbroker's license therefore the pawnbroker's law does not apply to you. Tell him that you do not lend money to people on collateral thus you have no obligation to refund any monies if the collateral disappears. The only surety bond the state could rightly ask for would be to insure your payment of sales taxes or income taxes owed to the state. This would have to be written into the law somewhere.

Ask the chief for his position in writing. Go to the Chief's boss (the mayor) and state your case, then go to the city council. If that fails, go to the DA and ask for a grand jury to look into the "writing of law" by the chief.

Be sure to inform the chief of your plans and invite him along to observe the process of him being canned. Explain to him that he will need to take notes for use in his reinstatement appeal. Make offhand comments as you drive down the road. "Have you considered auto sales?" "Nursing is hot right now." "Did you know that Herbalife gives 5% commission on three levels downline?"

[ilbob]

I would look at the actual law and see what it says. I would not be at all surprised to find out that a surety bond is indeed required on consignments.

[OCArmory]

When I got my secondhand dealer license they said that the bond was only required for pawnbrokers.
Mike

[WFAInc]

I would look at the actual law and see what it says. I would not be at all surprised to find out that a surety bond is indeed required on consignments.

There's another section for secondhand dealers that does mention firearms but no mention of any type of bonds.

I may have to take the Mayor route.

When I got my secondhand dealer license they said that the bond was only required for pawnbrokers.
Mike

Thats what we figured. Thanks for the info guys. Our previous license expired already and we've been trying to get this resolved since before the experation but this new COP is bieng a pain.

[joey thunder]

it's for liability, to be licensed and bonded. have you seeked out a surety company yet?

[WFAInc]

Well we have the neccessary insurance for liabilty and workmans comp. The insurance that the COP wanted is for pawn broker, we're not a pawnbroker. We're a second hand dealer, so we don't need surety bonds. I checked it out, the deputy chief agreed and we should be getting our second hand dealer lic pretty soon.