Duncan Proposes Crack Down on Pawn Shops

ba/pawn.pr 97-220 Contact: David Weaver, 301-217-6530; or
Elizabeth Davison. 301-217-3650

DUNCAN PROPOSES
CRACK DOWN
ON PAWN SHOPS For Immediate Release: July 3, 1997

In response to community concerns about an apparent proliferation of new pawn shops
in the area, Montgomery County Executive Douglas M. Duncan today announced that he will
submit emergency legislation to the County Council calling for a six-month moratorium on
the issuance of county use-and-occupancy permits for new pawn shops.
The action would temporarily stop what Community Development officials have called
"the uncontrolled growth of pawn shops," particularly in the Wheaton and Silver Spring areas,
and to provide more time to study additional regulations, such as increasing license fees,
instituting a bonding requirement, separating pawn shops from the "specialty stores" category,
or formulating a cap on the number of pawn shops which would be allowed in the County.
There are currently 23 licensed pawn shops in Montgomery County, compared to 12 each in
Fairfax and Baltimore counties. Prince George's, which has 40 registered shops, is in the
process of developing new zoning requirements and providing a separate category for pawn
shops. The neighboring county is also considering raising the licensing fee from $250 to
$2,500.
Meanwhile, County Chief Administrative Officer Bruce Romer has imposed an
administrative hold on the issuance of new licenses for pawn shops which will be in place
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until Duncan's proposed legislation is approved by the County Council.
"By submitting this emergency legislation, we're responding to several concerns,"
Duncan said. "The first is the likelihood that a concentration of pawn shops would attract
criminal activity. Next, such a concentration of shops tends to discourage new business
investment and finally, creates an impression of community instability.
"All of these factors are in direct conflict with our commitment to revitalize the older
commercial areas of the County," the Executive said.
Police Chief Carol A. Mehrling said, "We share community concerns about criminal
activity centering around pawn shops. In 1996, our Pawn Unit handled 377 cases, made 206
arrests and recovered merchandise totaling $535,780. This isn't to say that there aren't
reputable pawnbrokers. But, our figures bear out the fact that there is cause for concern,
especially when an increasing number of shops begin to operate in one or two communities."
A pawnbroker must be licensed by the State as a Dealer of Precious Metals. The
license, which is good for two years, costs $300.
To operate currently in Montgomery County, pawnbrokers must obtain a County
business license and pay $20 for a Second Hand Personal Property Dealers License which is
required for dealers who realize 10 percent or more of their total income from the sale of
second-hand property. Some pawnshops may not be licensed at the County level because
they derive most of their income from loans, not sales.
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Pawnbrokers must also report buy/sell information to the police department.
Under the County's Zoning Ordinance, pawnshops are listed under "specialty stores,"
which also include antique, second-hand and consignment shops.
According to Elizabeth Davison, director of the County's Department of Housing and
Community Affairs (DHCA) said it was time for Montgomery County to respond because
"surrounding jurisdictions are tightening controls and limiting pawn shops, and we're
concerned that our revitalization areas, such as Wheaton and Silver Spring, could be overrun
by pawn shops.
That would negate all the work we've been doing to upgrade these areas."
Following expressions of concern from Natalie Cantor, director of the Mid-County
Services Center in Wheaton, DHCA decided to investigate responses by neighboring
jurisdictions to similar problems. Subsequently, a Pawn Shop Task Force, consisting of staff
from DHCA's Community Development Division, the Police Department, Permitting Services
and the Mid-County Services Center was created in March.

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