The Pawn Shop industry is regulated by various Federal Laws, including the Patriot Act, Truth in Lending Act, and Credit Opportunity Act. Both state and local
authorities further regulate Pawnbrokers and Second Hand Dealers by making it illegal to operate without a license. Regardless of your location, a pawn shop industry license will
almost always be required, and in certain jurisdictions, it may even be required for your employees.
In addition to completing an application form and fee, states generally also require applicants to provide varying supporting documentation. This may include fingerprints, credit
reports, financial statements, letters of reference, surety bonds and/or proof of insurance. Application fees may range from $200 to about $1,000. To remain in compliance with
industry regulations, each business is required to maintain its license by filing renewals and, in some cases, daily reports of their transactions.
Pawnbrokers and Second Hand Dealers caught operating without a license (or with an expired license) may be subject to various penalties. These may consist of a
substantial fine, imprisonment, or both.