2009-0962009-96
Resolution Directing Town Attorney to Draft Local Law to Regulate Pawn Shops
At a regular meeting of the Town Board of the Town of Wappinger, Dutchess County,
New York, held at Town Hall, 20 Middlebush Road, Wappingers Falls, New York, on February
23, 2009.
The meeting was called to order by Christopher Colsey, Supervisor, and upon roll being
called, the following were present:
PRESENT: Supervisor
Councilmembers
ABSENT:
Christopher J. Colsey
William H. Beale
Vincent F. Bettina
Maureen McCarthy
Joseph P. Paoloni
The following Resolution was introduced by Councilman Bettina and seconded by
Councilwoman McCarthy.
WHEREAS, the Town of Wappinger does not have any local law or ordinance that
provides for the licensing and regulation of pawn shops; and
WHEREAS, Article 5 of the General Business Law entitled "Collateral Loan Brokers",
and Article 9 of Town Law entitled "Ordinances and Licenses" grants the Town the authority to
establish regulations for licensing of collateral loan brokers, commonly known as pawn shops,
within the Town of Wappinger; and
WHEREAS, certain persons have expressed interest in establishing collateral loan
broker locations within the Town; and
WHEREAS, New York Law prohibits the Town from excluding collateral loan broker
locations from the Town; and
WHEREAS, it is in the best interest of the citizens of the Town to establish proper
regulations and licensing procedures for said businesses; and
WHEREAS, it is appropriate for the Town Board to determine in which zoning districts
collateral loan brokers shall be permitted;
NOW, THEREFORE, BE IT RESOLVED:
1. The recitations above set forth are incorporated in this Resolution as if fully set
forth and adopted herein.
2. The Town Board hereby authorizes and directs Albert P. Roberts, Esq., Attorney
to the Town, in consultation with the other consultants to the Town, to draft a
Local Law to regulate collateral loan brokers within the Town, and said Local
Law shall be presented to the Town Board for its consideration.
The foregoing was put to a vote which resulted as follows:
CHRISTOPHER COLSEY, SUPERVISOR
Voting:
AYE
WILLIAM H. BEALE, COUNCILMAN
Voting:
AYE
VINCENT F. BETTINA, COUNCILMAN
Voting:
AYE
MAUREEN McCARTHY, COUNCILWOMAN
Voting:
AYE
JOSEPH P. PAOLONI, COUNCILMAN
Voting:
AYE
Dated: Wappingers Falls, New York
2/23/2009
The Resolution is hereby duly declared adopted.
Q�C/ �11
VHN-- C. NIASTERSON, TOWN CLERK
VERGILIS, STENGER, ROBERTS & DAVIS, LLP
ATTORNEYS AND COUNSELORS AT LAW
GERALD A. VERGILIS*
KENNETH M. STENGER
ALBERT R ROBERTS
THOMAS R. DAVIS
JOAN F. GARRETT**
KEVIN T. McDERMOTT
ANGEL I. FALCON
ANTHONY M. DEFAZIO***
JAMES P. HORAN***
LISA M. COBB
*ADMITTED TO PRACTICE
IN NY & FLA.
**ADMITTED TO PRACTICE
IN NY & CONN.
*** ADMITTED TO PRACTICE
IN NY & NJ
February 11, 2009
1136 ROUTE 9
WAPPINGERS FALLS, NEW YORK 12590
(845)298-2000
FAX (845) 298-2842
www.vsrp.com
e-mail: info@vsrp.com
Hon. Christopher J. Colsey, Supervisor
Town of Wappinger
20 Middlebush Road
Wappingers Falls, New York 12590
Re: Collateral Loan Brokers
Pawn Shops
Dear Chris:
OF COUNSEL:
KAREN MacNISH
LEGAL ASSISTANTS:
AMY E. DECARLO
MARIA L. JONES
SANDRA A. OAKLEY
CLOSING COORDINATOR:
SUSAN E. CAFFINE
POUGHKEEPSIE OFFICE
276 MAIN MALL
POUGHKEEPSIE, NY 12601
(845)452-1046
NEWBURGH OFFICE
299 N. PLANK ROAD, SUITE 106
NEWBURGH, NY 12550
(845) 567-3783
Supervis'-. _ . ' fice
FEB 12 2009
(Receive
If you will recall, John Degnan introduced us to a gentleman who was going to open up a
Collateral Loan (Pawn Shop) at Degnan's office site. The gentleman inquired how he
could get an appropriate license from the Town. Attached please find a research memo
which requires the Town to issue a license to this business before it can open. It appears
we will have to prepare a Local Law to license Pawn Shops. Please advise if you wish us
to begin drafting such a Local Law or await a full Town Board approval? Please advise.
Very truly yours,
VERGILIS, STENGER, ROBERTS & DAVIS, LLP
ALBERT P. ROBERTS
APR/jm
, 0'6 �r f �1;�
MEMO
To: Hon Christopher J. Colsey, Supervisor
From: Albert P. Roberts and Lisa M. Cobb
Date: February 11, 2009
File: Town of Wappinger
Re: Collateral Loan Broker Licensing Requirements
You asked me to determine whether the Town, which presently does not have a
local law regulating collateral loan brokers ("CLB"), a/k/a pawn shops, is required either (a)
to issue a license to an individual seeking to operate such a business or (b) to adopt such a
local law.
In brief, I believe that the Town is obligated to issue the requested license. I do not
believe that the Town is obligated to adopt such a local law, although I believe that it would
be advisable for the Town to do so.
Applicable Statutory Provisions
It is clear from the statutes that a license is required before one may operate as a
CLB. See Gen. Bus. Law § 40 ("No person ... shall hereafter carry on the business of
collateral loan broker, without having first obtained from ... the licensing authority of the
local governing body where the business is to be carried on a license ....")
Section 41 of the GBL authorizes the local governing body ("LGB") to obtain
"satisfactory evidence of [the proposed licensee's] good character." It also mandates that
the license set forth the location of the proposed business. Id. The fee for such license
shall not exceed $250 annually. Id. Every person receiving such a license shall file with
the LGB a bond, executed by the licensee and two sureties, "in the penal sum of ten
thousand dollars." Every license expires annually but may be renewed.
Section 53 of the GBL requires that the person seeking the license also file with the
State Comptroller a "Collateral Loan Broker's Registration Statement." The license must be
obtained before the Statement may be filed. The Statement is required to include the date
on which the CLB obtained a license from the LGB and the name of such LGB.
O:\Wappingeffown Board\1-GeneralTB\2009\2-11-09 memo to Colsey pawn shop licensing.doc
Most of the regulations use permissive language, "may" enact an ordinance, etc.
The only regulation that uses mandatory language is Town Law § 137, which provides that
the Town "shall establish" uniform fees for the issuance of licenses, when such licenses are
required before a business may operate.
Analysis
The case law on this topic is sparse. No Attorney General Opinions were found that
deal with pawn shops or CLBs. No cases were found that mandated that a Town or other
LGBs adopt such ordinances. The few cases that were found dealt with ordinances that
were discriminatory or too restrictive (a regulation that proscribes a business is of "doubtful
validity").
Only one State Comptroller Opinion was found on the topic. It provides: "A license
must be obtained from the local government in order to cant' on the business of collateral
loan broker. In addition, a licensed collateral loan broker must file a registration statement
with the State Comptroller in order to cavy on the business .... the licensing of collateral
loan brokers [ ] is exclusively a power of local government." Opns St Comp, 1989 No. 89-
37.
In an informal Attorney General Opinion from 2003, the AG analyzed certain
wagering regulations, which provided that an application for a simulcast license for an Off
Track Betting establishment must include a copy of the resolution from the LGB approving
the proposed application and requesting that the license be issued. The AG concluded
that, because of this requirement, the LGB could prohibit the establishment within its
borders by refusing to enact the required regulation. The AG wrote:
This statutory [wagering] framework suggests that the
Legislature intended that a local governing body would make
the determination of whether to support the location of a
simulcast theater within its boundaries in the context of a
specific licensing application. We are of the opinion,
therefore, that a village zoning ordinance may not
prospectively prohibit all Simulcast theaters in all zoning
districts within the village.
2003 N.Y. Op. Atty. Gen. (Inf.)1055, Informal Opinion No. 2003-10. Since the statute concerning CLBs does
not contain similar provisions, I believe that the Town is not free to prohibit CLBs within its borders.
I base my conclusion that the Town must issue the license on a Court of Appeals
case. Concerning a license to conduct pari-mutuel betting on horses, the Court wrote:
"A 'license' is permission to exercise a pre-existing right or privilege which has been
subjected to the regulation in interest of the public welfare." Madden v. Queens County
Jockey Club, 296 N.Y. 249, 72 N.E.2d 697 (N.Y. 1947). The Court distinguished
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franchises, as follows: "A `franchise' is a special privilege, conferred by the state on an
individual, which does not belong to the individual as a matter of common right, and
creates a privilege where none existed before; its primary object being to promote the
public welfare."
Therefore, I believe that the Town must issue the license but should enact an
ordinance to regulate same. Section 136 of Town Law provides that the Town Board may
provide by ordinance for the licensing or other regulation of CLBs. Included in the
ordinance should be a statement concerning in which zoning districts such establishments
should be permitted.
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