Two weeks ago Senator Victor Ramirez proposed PG 416-11. This bill put a holding period of 30 days for all precious metals purchased and pawned in Prince Georges County. It is a state level bill but targeted Prince George’s County directly. Prince George’s County is already required to hold all non-precious metal buys for 30 days but not pawns – the state of Maryland is required to hold precious metals for 18 days. Senator Ramirez was simply trying to make all holding periods the same for all of Prince George’s County but in the process missed how pawns/loans were handled. The intent of this bill was to target the ‘cash for gold’ type of businesses and pawnshops simply got caught in the crossfire. I would like to thank the delegates to Prince George’s County that took their time to meet with me as well as Senator Ramirez for his willingness to cooperate and work with us to make this the best bill that it could be. With the amendment that was worked out between myself and Senator Ramirez all precious metal buys will be held for 30 days but pawns will revert to the state mandated 18 day hold. We are more than appreciative that Senator Ramirez took our concerns seriously and made the appropriate changes to the bill.
The speech I gave at the public hearing is below:
Prince George’s County Pawnshops have been required to file their reports electronically for the last 5-10 years. The electronic reports include everything from a customer’s drivers license details, a second track able identification and a detailed report as to what the customer is selling or pawning. When it comes to precious metals this includes the weight of the precious medal, the length/type if it is a chain, the size if it is a ring, the stone count, type of stones and any identifiable markings that may be seen. Legislation mandating a 30 day hold period on hardgoods, everything except precious metals, was pushed for in 1997. It is important to note that even this legislation included only buys and not pawns. The reason cited for this push was the backlog of data that had not yet been entered into the police database. At the time there was one police officer entering every transaction by hand into the database. The backlog was weeks and sometimes months behind. Items were being held, released and sold before being entered into the police database. With today’s technology data is entered automatically 12-24 hours after a transaction. The information is available almost immediately and with great detail. Within the next year, with the roll-out of the BWI system, the data will be streamed immediately after the transaction is processed. It is counter intuitive and punitive to create a longer holding period when laws and technology have done away with the problems that had at one time existed.
Precious metals are commodities and their prices are on a constant flux. This law will not only have a negative impact on our businesses but will also negatively impact all of our customers. Having to hold precious medals for 30 days will force us to offer lower prices as our risk will climb dramatically. The price of gold is known to fluctuate more then 10-15% over any given month. Customers needing a loan will be offered less money and will either have to accept the lower offer, move their business to surrounding counties and states or mail their gold to gold buyers where tracking is non-existent. The extremely rare case the extra hold period would make a difference is outweighed by the burden put on the tens of thousands of customers needing loans and the loss of business and income merchants in your community would face.
This legislation was also intended to capture the fly-by-night gold buyers. I believe law passed last year that has done away with this issue. It would be very difficult for an outside business to setup in a hotel, or shopping mall and buy gold for a day and leave the next as they had in the past.
One of the largest deficiencies of the law is that it does not differentiate between pawns, which are loans based on collateral, and buys. There would be a great loss of business if we had to tell our customers they could not redeem their pawns, their property, for 30 days. I have never heard of an instance where a stolen item was pawned and redeemed. This will also send our customers to surrounding counties and states that do not have the same holding period.
There are bad seeds in any and all industries. There are many merchants conducting illegal and completely unregulated secondhand precious medal buys in this community. There is already great legislation and laws that govern how we transact our businesses. We take pride in the collaborative relationship we have with the police. Take this time to enforce the laws that are already on the books and help level the playing field for the merchants that pay taxes, maintain employees, invest in our community and follow the letter of the law.